When is the best time to list your house? Your real estate agent has probably told you to wait until the spring because of the common belief that buyers just aren’t active in the winter and you don’t want your house to sit on the market. Fortunately, a new trend in home buying is changing the typical winter slowdown.
According to current housing market data, January will actually be a good month to list your house. “Sellers tend to be more reluctant to list during the colder time of the year when the market typically makes a seasonal slowdown,” according to George Ratiu, the senior economist at Realtor.com. “[But] as shoppers modify their strategies for navigating a housing market that has become more competitive…the search for a home is beginning earlier and earlier.”
This year that should be more true than ever as buyer activity is stimulated by changing needs due to work-from-home conditions, future access to the coronavirus vaccine and increased economic activity.
In fact, buyers have been hitting the market in search of homes for sale early every year since 2015. In 2019, January had one of the highest numbers of views per listing.
What is bringing a historic number of buyers into the market so early in the year? There are a few reasons: a shortage of available homes for purchase, low mortgage rates and rising home prices.
Low Mortgage Rates
Remember the widespread panic a few years ago that young people weren’t buying houses and the real estate market would suffer as a result? Don’t worry, millennials and older Gen Z are entering the housing market and they’re excited to buy for a number of reasons.
The most significant is the historically low mortgage rates that are projected to continue through 2021. Experts at Freddie Mac and the Mortgage Bankers Association are forecasting 30-year fixed mortgage rates will come to 3-3.2% through 2021 and might increase in 2022 to about 3.6%.
Shortage of Home Inventory
“As millennials embrace homeownership and take advantage of this year’s unexpectedly low mortgage rates, demand is outstripping supply…” said Raitu. The number of houses available for sale has hit an all-time low as demand far outstrips supply. Millennials aren’t the only homebuyers in the market and even with the rise of new construction, demand far outstrips supply.
Rising Home Prices
The shortage of available inventory has put upward pressure on home prices across the country. Home values are expected to continue to appreciate over the next five years while the cost of buying a home is expected to increase by about 5 percent this year, according to Frank Martell, the president and CEO of CoreLogic. These factors coupled with a shortage of houses for sale means that buyers in the market are eager to purchase now so they can find a home in their price range and benefit from that increased equity over the next few years.
What does all of this mean to you as the seller? If you wait until the spring to list your home, you’re waiting too long and you’ll be listing your house when all of your competition is doing the same. The demand for homes coupled with low mortgage rates creates an ideal seller’s market that you cannot miss out on.