If you’re confused by what you read or hear in the news regarding the housing market, you are not alone. While one headline blasts that mortgage rates will continue to rise, another claims that they’ll even out in 2023, somewhere around 5%.
Opinions also vary on whether home prices will continue to rise and by how much. Then, there are the truly off-the-rails folks who describe the current market as a ‘housing bubble.’
Although there is no widespread consensus (as of this writing) on which direction everything will go, we can tell you with certainty that we are not in a housing bubble akin to the 2008 collapse. That was fueled by inexpensive credit and relaxed lending standards, neither of which exist today.
Yes, the market appears to be shifting, but it’s sporadic, and not yet consistent nationwide.
Let’s take a look at why now may be a good time to sell and why, if you need to sell, you shouldn’t wait.
Prices are still on the rise
Despite the doom-and-gloom housing market promoted in the media, “… from June through July of this year… prices still rose in 98% of US markets,” according to CNN.com’s Anna Bahney, citing a National Association of Realtors study.
In fact, according to that study, the median price, nationwide, for a single-family home increased “… 8.6% in the third quarter, reaching $398,500.”
And, although the number of home sales is dwindling, prices are still on the rise.
“The median price of an existing home sold in October was $379,100, an increase of 6.6% from the year before,” according to Diana Olick (citing research from National Association of Realtors) at cnbc.com.
So, yes, home prices are still appreciating, just not as quickly as we’ve become accustomed to. Eventually, they will fall. Aimee Picchi with cbsnews.com cites the Dallas Fed’s claims that the drop could be “… as much as 20%.”
If you need to sell you might want to consider doing so as soon as possible. You’ll still be able to get your home sold for more than you would have realized before the hot sellers’ market.
- Check with your real estate agent on the status of the local market.
- Are homes still selling for over the asking price?
- If the market is still favoring sellers, don’t be afraid to jump in!
- Are there cash investors in the market for homes like yours?
- Are there still low levels of housing inventory? This situation limits a home seller’s competition.
The supply of homes available is still quite low
The number of homes available represents the ‘supply’ side of supply-and-demand in the housing market. Also known as ‘inventory,” it remains stubbornly low, “… which is why some homes for sale are still receiving multiple offers,” claims Lawrence Yun, the chief economist at the NAR.
He goes on to say that, in October, nearly one-fourth of homes for sale sold for more than the asking price.
Buyer demand is waning
In an effort to cool inflation, the Fed has begun raising interest rates. When this trickles down to the mortgage market, a certain number of homebuyers will no longer be able to afford a home and drop out of the market.
If you own a ‘starter home,’ this is something to consider when deciding whether or not to sell it. A starter home, by the way is one with less square footage than average for the area and priced at the lower end of the spectrum.
If, on the other hand, you’ll be selling a larger or even a luxury home, you’ll still find many buyers in the market. At least for now, so time is of the essence. If rates continue to rise, more buyers may decide to put their home purchases on hold.
Your real estate agent is your best source of information at this time. Thankfully, that information is free. Reach out to us today.