Housing inventory was thin going into the pandemic and has remained that way into 2021. Part of the reason is that homeowners who would have put their house up for sale in a normal year, held back.
With low interest rates continuing to drive demand and low inventory keeping the market extremely competitive, the simple economic laws of supply and demand have led to rising home prices amidst a seller’s market.
As appealing as higher prices are, is there any harm in waiting a while, before putting your house on the market? Here’s why you may want to list your home sooner rather than later:
Inventory remains low…for now
When everything was tallied, the inventory for February of this year was about half of what it was in 2020. That’s unwelcome news for buyers, but great news if you’re a seller. You may have the luxury of choosing from among multiple offers.
And, even in places like Arizona where there is little seasonal difference, the spring could bring an uptick in homes hitting the market as school winds down for the summer. The other reason the tide could turn, is the wider distribution of coronavirus vaccines. With more people receiving the vaccine, homeowners who had stayed on the sidelines, fearful of contracting the disease, are now likely to come onto the market.
Mortgage rates could edge upward
Interest rates have been at or near historic lows for months. But as they start to climb, even if still appealing from a longterm perspective, they become less exciting to homeowners. Without offering a forecast—because it’s hard to say what direction rates will take over the next several months—if they do continue their upward migration, it’s possible demand for homes will wane bit.
Going back to the laws of supply and demand, if more buyers decide they’re going to stay put, prices could start to move downward, meaning the potential for a lower sale price for you. That’s another reason to list your home sooner, rather than later. Interest rates have the potential for throwing some cold water on buyers.
Even if rates continue to drop in the next few months, listing now may be the right call, as more buyers stay in the marketplace, hoping to take advantage of low rates before they eventually go higher. While it’s true there’s really no surefire way of predicting which way rates will go, or when, if they stay in the current pattern, it will be enough to keep buyers in the market.
What else should you consider?
Low interest rates and tight inventories make this a great time to sell your home. But how do you know for sure it’s the right move for you?
Start by asking yourself these types of questions:
- Are you ready to begin your own search for a house?
- Are you prepared to move?
- Are you prepared to apply for financing?
- Are you comfortable having strangers in your home? If not, are do you know your alternative options?
The overall picture for sellers indicates this is a great time to list. It’s possible that even slightly higher rates could start to diminish the pool of buyers. And, as more people get vaccinated, more homeowners may decide they don’t mind listing their home. Listing now helps to avoid these potential turns in the road.
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