Is It Time To Sell?
The real estate market is acting as the very definition of a seller’s market. There is sky-high demand from home buyers because of low mortgage rates. However, the inventory of available homes is at its highest point in 2021. This sets up a real estate environment where home sellers might start losing the leverage they have had all along. While home sellers are receiving multiple offers on their homes, homebuyers are finding themselves going up against less competition. Bidding wars are still happening, but they are not as fierce as they once were. There are plenty of indications that homebuyers are starting to find themselves in a better situation. This is why it is better to sell your home now before you lose all of the advantages of a seller’s market.
Sell Your Home When Leverage is Highest
It is always better to sell your home when you have the most leverage. This allows you to get the highest price possible for your home. When it comes to any market, it’s always ideal to buy at the lowest point and sell at the market’s peak. Unfortunately, it is very difficult to know when you are at a peak. This makes timing a market a risky proposition. However, there are indicators that can help guide you. Price is always determined by supply and demand. You can look at factors that impact supply and demand to give yourself an idea of where you are in the cycle. Right now, there are some decent indicators that the supply of homes might increase and that demand might taper off. The team at Streamline Realty is here to walk you through some of these indicators.
Homeownership Rates Are Declining
The U.S Census Bearue reported that homeownership rates were unchanged in the third quarter of 2021, but were down two percent throughout the year. The highest homeownership rates belong to people who are over 65 years of age. The lowest belongs to people who are under 35 years of age. These statistics may seem daunting, but the housing market is always changing. If a large amount of homes becomes available, more people will try to fill them in. The lack of people owning homes also means that eventually, people will try to take homes. You have the option of waiting to sell your home or selling it now. Both options are viable as homeownership rates will rise again.
Home Seller Sentiment is Changing
Homeowners have seen their home values rise dramatically since the beginning of the pandemic. While many homeowners could have sold their homes and locked in large increases in equity, many have been reluctant. This is because of a fear of missing out. Homeowners did not want to miss out on even more increases in equity as their home value continued to increase. However, it looks like FOMO is receding and home seller sentiment is changing.
Mortgage Rates are Increasing
It’s also important to note that mortgage rates are rising. This has caused demand for houses to fall. The economy opening back up because of the vaccines has caused a large return to the market. As we approach the end of 2021, more people will be looking to buy or sell their mortgages. Freddie Mac noted that rates will most likely increase, citing a 3.4% mortgage rate by the end of 2021.
It's important to plan ahead while knowing what this could mean for the market. Rising mortgage rates for the future can cause a decrease in home buyers. This is because some people do not think that today’s high home prices are as attractive if they cannot get a home loan at rock-bottom rates. They would compare today’s mortgage rates to those in late 2021 and feel cheated out of a better deal. That feeling of losing out on a better rate would lead them to not sell or buy a home. Staying informed is key to knowing what moves you should make in the market.
Final Thoughts
Remember, it is almost impossible to time a market correction. It is hard to know when you are at the peak or at one of the lowest points of any of the dips. However, when it comes to selling, it’s always better to be one of the first to sell than one of the last. Selling now while inventory is low allows you to take advantage of today’s seller’s market and get the most for your home. Waiting a long time risks that more homeowners will try to sell their home, which decreases your leverage.
One thing to keep in mind is that you do not have to sell your home. If you love your home and see yourself there for the long term then you should not sell. Wanting to stay in your home long-term means that there isn't a reason to sell, even with a seller’s market. Owning a home is about much more than maximizing an investment. It is about having a place where you and your loved ones can make memories. However, if you have thoughts of selling your home, contact us! The team at Streamline Realty is here to talk you through your options. We will give you a realistic picture of what you can expect.
