As home prices across the country surge, so do waves of coronavirus cases. And, to complicate matters further, the pandemic home buying rush has left home inventory severely depleted. While it’s the right time to sell your house at a premium, some sellers may find that they can’t find another suitable property as supply levels are at all-time lows.
So, is it a good time to sell your home? Here are some key factors to consider.
Will you make a good profit?
The opportunity to sell your home may look sweater when you’re seeing other homes sell over asking price. You may want to strike while the iron is hot, but it’s important to understand where home prices stand.
According to HomeLight in their Q4 2020 survey of over 1,000 top real estate agents, “74% of respondents said that home prices were on the rise in their area, in spite of the winter season. What’s more, 48% of agents believe home values in their market will continue to climb over the next six months, and 46% noted bidding wars were increasing in their market.”
Now, when comparing prices a year ago versus now, the National Association of REALTORS® reports that the median existing home price increased 12.9% year over year in December 2020 compared to $309,800. Another study by Renofi found that over the past 10 years, home prices in the U.S. have increased by nearly 49%.
But, it’s important to note that real estate is local and hyper-local in many cases. To get a sense of how fast home values have increased in your area, check with a local REALTOR®.
Will you find a buyer?
Homes with ample square footage, enough bedrooms for a home office, a dedicated outdoor space, and a suburban location are hot items for buyers right now. Purchase demand has reached an all-time high, partly due to the historically low interest rates and the drive for more space for remote work & at-home recreation.
The Mortgage Bankers Association’s weekly survey indicated a record demand for mortgage applications. They say a 42.2% year over year rise in applications between December 2019 and December 2020, one of the sharpest increases the association has ever recorded.
The number of first-time homebuyers has also increased over the past year. According to the National Association of REALTORS®, 36% of total homebuyers were first-time homebuyers in April 2020. As these first-time buyers enter the market, they are contributing to the supply and demand imbalance – driving purchase demand even higher.
Will your house stand out among other inventory?
Picture the current state of housing inventory like this: a retail shelf left haphazard & empty after a Black Friday sale. Your house, if you list it now, is like the one handbag left in the back that the employee puts out at the last minute. As soon as it hits the market, it’s going to get snatched up – even if it has a few dents & scratches.
While low inventory translates to a fast and profitable sale for you, it can also put you in a tough position if you are trying to find a new property. Be sure to have a plan for where you’ll stay if your home sells faster than you expect. If you are already in the process of purchasing your new home, negotiate closing dates to allow yourself time to finish both deals and make your move.
What do local experts advise?
Now could be an ideal time to sell your home, but it may be equally tempting to stay put. The best place to start is by gathering more information.
Connect with a local real estate agent to weigh your options in more depth. Team Melton has over 50 combined years of real estate experience to assist you through every step of the process. Contact us today to get started on selling your home!