As we step into 2021, many of us are anxious to celebrate new beginnings. Because of this, current homeowners are pondering putting their current home on the market and purchasing a new one. Here is our list of why you shouldn’t wait to buy or sell your home.
Why You Shouldn’t Wait to Buy a Home
If you’ve found a home that satisfies your needs and your budget, it’s better to act now rather than depend on expecting prices to go down in the future. Also by taking action now, you’ll be able to guarantee current mortgage rates that could make the investment on your home worth significantly more down the road as you save interest over time.
1. Good Timing
The market traditionally experiences the highest demand and the lowest inventory of the year between January and May. Your best bet is to make an offer now.
2. Home Prices May Increase
National Association of Realtors chief economist Lawrence Yun predicts new-home sales will jump 21 percent and existing-home sales will climb 9 percent in 2021. He predicts home prices will rise by 3 percent in 2021. “The consequent rise in home prices have boosted wealth accumulation for homeowners,” Yun said.
3. Don’t Wait for Interest Rates to Rise
Even if home prices are flat a year from now (which is not expected), an increase in interest rates means you’ll have to borrow more money to buy the same house. Buyers should consider three things before they purchase a home: Can I afford the monthly payments, do I like the location, and am I planning to live in the home for at least five years?
“The average contract interest rate for 30-year fixed-rate mortgages increased to about 2.92% last week from 2.88%. The average rate on the 15-year fixed rose for the first time in seven weeks, to 2.48%.” – Forbes.com
Why You Shouldn’t Wait to Sell
Many homeowners think selling in the spring when more buyers are in the market is the way
to go. In reality, it’s more about the ratio of buyers to sellers that creates opportunities. Selling when the fewest number of homes are available to buy is what puts sellers in the driver’s seat.
With today’s high buyer traffic and low inventory, this combination makes now the
ideal time to sell – before others in the same position put their homes on the market in the spring.
1. Less Competition
If you haven’t seen as many “For Sale” signs in your neighborhood recently, you’re not alone. According to the National Association of Realtors, inventory has dropped by almost 40% over the last few months. This is wonderful news for you (todays seller!)
Dwindling supply and high buyer demand will put your home in the spotlight if you decide to list this mid/late winter. It means the ball will be in your court during negotiations. Since there are fewer homes on the market right now, you also won’t have to compete with other sellers waiting to move in the spring/summer. Another benefit is that at this time of year, only serious buyers will be in the marketplace. You and your family will not be bothered by those just “window shopping” and not looking to make a purchase.
Housing is lacking at this time of year, so the choices buyers have will be limited. The best time to list your home for the most exposure occurs in the late fall and winter months (November – February). Temperatures aren’t the only thing that heats up in the spring – so do listings! In 2017, listings increased by nearly half a million houses from December to June. Don’t wait for these listings to come to market before you decide to list your house.
2. Interest rates are still low, so take advantage of it now
Low interest rates help drive buyer demand and make homeownership more affordable. As a seller, that means you’ll draw in a larger audience of financially-qualified buyers and maybe even sell faster than you expect. If you plan on buying another home, you’ll be able to secure a great rate, too.
Interest rates reached record lows in 2020, which tempted many buyers to enter the market even amidst a pandemic. In November, rates actually dipped below 2.3%—that’s the lowest they’ve been in recorded history!
Most experts believe interest rates won’t spike during 2021, but we’ll probably see some slight increases as the economy continues to bounce back. Listing your home before rates go up comes with a lot of benefits, and it might even be the smartest financial decision you ever make.
3. Home prices keep rising
If you’ve lived in your current home for more than a few years, now could be the perfect time to sell and cash in on your equity. In a recent study, the National Association of Realtors found that home prices have increased 13.4% since 2019. In 2021, prices are expected to increase by 8%—and in 2022, that projection drops to just 5%. Selling your home when you know the market is doing well is a surefire way to yield an impressive profit.
4. The Market Will Change Before Spring Hits
As 2021 progresses, and the pandemic is hopefully behind us, there will be many more houses coming to the market. This includes existing homes and newly built homes. Don’t wait for that increase in competition in your neighborhood. Most experts aren’t expecting another sudden crash, but that doesn’t mean you should wait until spring to list your home.
Currently we’re seeing a record amount of home sales, as well as a surprising number of motivated winter buyers. So if you want to be smart about your move, it makes sense to sell sooner rather than later.
For comments or inquires contact:
Alex Khodadad, Broker, CPA
1930 Contra Costa Blvd.
Pleasant Hill, CA 94523
Source: forbes.com, alisonborrelli.com
As an effort to continue to bring our community together, we would love for you to Like and Follow Us on Facebook Page: In and Around Pleasant Hill. You can also say hi to Alex by following him on Instagram: @alex.khodadad!