Remember last month when we said January would be a good time to list your home if you’re thinking about selling this year? The good news is that the sellers’ market is expected to continue through 2020, making this a great year to finally sell your house.
The housing market is facing an all-time low in the number of homes available for sale. Buyers are out in historic numbers and demand for houses is outstripping supply. Sellers are in a great position to gain more on their home sales in a competitive market. Here are the top four reasons why you should sell your house in 2020:
1. High Demand & Low Supply
“The market is struggling with a large housing undersupply,” said George Raitu, the Senior Economist at Realtor.com. “The number of homes for sale is poised to reach historically low levels.”
There may be fewer homes for sale but buyer traffic is up in all regions of the country- especially millennial buyers. They’re motivated by low interest rates and are ready to purchase. However, sellers are reluctant to list their homes because they’re not sure they can find another house to move into- we’ll address this further down.
According to NAR®, buyer traffic far outpaces seller traffic in the current market.
The combination of high demand and a low supply of homes for sale makes this a competitive market for buyers. Sellers should take advantage!
2. Home Prices Will Continue to Increase
High demand and low supply drive up prices. And the good news for home sellers? Home prices are expected to appreciate through 2022. “When it comes to home prices for sellers, the main question is: how much money can I make on my home sale?” said Dave Ramsey. The proof is in the numbers. In 2019, sellers saw a home price increase of about $65,500 on a typical sale. This was a high point in the housing market- the highest gain in home sale prices in 13 years.
According to Corelogic, home prices in Iowa are projected to increase an average of 5.5 percent from last year, compared to the 3.6 percent rate that is the historical average for real estate appreciation. As a seller, you stand to potentially earn a significant gain in the value of your home this year.
3. All Sellers Can Benefit- Even Older Folk and Retirees
After the housing market crash in 2008, homeowners started staying in their homes longer. From 1985 to 2008, the median time most people stayed in their homes before selling and moving into a new house was about six years. After 2009, that number jumped to 8-10 years as homeowners were too hesitant to try and sell.
If you would have normally sold your home by now, you may now be considering the possibility.
The good news is, you’ve built up more equity by staying put for a few more years, even if you’re now retired or not working full time.
NAR® conducted a survey across generations to find out what each age group thought about the current market. Older generations, specifically Gen X and young Boomers, felt the most strongly that now is a good time to sell their homes.
Many mortgage lenders are now allowing older adults to qualify for mortgages based on pensions, Social Security and interest as sources of income. In fact, according to Realtor.com, borrowers over the age of 65 make up about 10 percent of all mortgages that are originated each year.
4. Sellers Shouldn’t Worry About Finding a New Home
You’ve just read about the low supply of available homes for sale and may be thinking ‘How do I find a new house to move into?’
A possible solution is new construction. While it obviously takes longer to build a new house than to just move into an existing one, you may find it to be a good alternative to house hunting. “The sales pace for newly-built single-family homes ended 2019 with a gain of 10%…” said Robert Dietz, the Chief Economist at the National Association of Home Builders. “This marks 2019 as the best year for new home sales since the Great Recession.”
Builders are trying to address the wide gap in demand in the housing market right now and realistically that will take time. But a good real estate agent will connect you with the right builder who can work with you to get your dream home built while you work on listing your current house.
Buyers- Don’t Worry! It’s Still a Good Time for You to Buy
Buyers, you may be reading all about rising home prices and low inventory and start to worry that maybe the market is too tough for you right now. Don’t worry! It’s still a good time for you to house hunt for several reasons.
Interest rates are still expected to stay low through 2021, even though home prices are increasing. That doesn’t mean necessarily mean your monthly mortgage payments will increase.
Mortgage lenders use multiple factors, like your credit score and debt-to-income ratio, to determine your mortgage payments. If you have a good credit score and a big enough downpayment, you won’t necessarily have to anticipate higher mortgage payments.
Keep in mind, your real estate agent is there for a reason! A good agent will keep you within your budget and help you find the right house for you that won’t break the bank.
“If you’re planning on buying a house, home prices might look intimidating,” said Ramsey. “But, remember, just because you saw house prices that other people in the nation are buying, doesn’t mean you should look for a house in that price range. Instead, focus on your own budget. Don’t worry about pricing trends. A good real estate agent can help you find a home you love that’s within your budget.”
There are a lot of changes happening in the real estate market right now. But, all signs point to it being a great year for sellers to finally list their homes and potentially see a significant gain in the value of their home sales. The right real estate agent will make this happen for you!