Read the blogs of real estate agents across the country and you can’t help but feel pity for us. While the strong sellers’ market is a boon to homeowners (who deserve a break after bearing the economic brunt of the recession) it’s devastating to our home-buying clients. It’s not so much the type of market, however, as it is the sheer volume of homeowners who are, for some reason, resistant to sell right now that is troubling the market. We do expect this to change, somewhat at least, when school lets out for the summer and parents are more inclined to uproot the family.
In the meantime, real estate agents, such as myself, are trying to educate homeowners on why this is such an amazing time to sell a home in Madison. Check out some of the reasons below.
1. It’s the best selling season
Last year a major real estate analytics firm conducted a study that found that the best time to sell a home is from the middle of March to the middle of April. During this window, homes sell 15 percent quicker and for at least 2 percent more than the home would have sold for at any other time of the year.
So, sell your $250,000 home later this year and make, hopefully, $250,000. Sell it now, however, and you may be looking at an extra $5,000. You’ve just upped your price range for your next home!
2. There’s less competition
As mentioned above, homeowners with children wait until school lets out for the summer before moving. That means that right now you’ll face less competition from other homes on the market, raising the possibility even higher that yours may bring multiple offers.
Another bonus to the less-competition aspect of the market is that closings are speedier. With fewer homes going through the closing process, lenders and title companies have more time to devote to those that are, making the process much faster and far smoother.
3. Demand is amazingly high
I can’t even begin to list how many buyers I have waiting for homes in certain price ranges, in certain areas, who are desperate to buy. Demand is exceptionally high right now and inventory is incredibly low. If you list now, your home may just be the belle of the market.
4. Mortgage rates aren’t exactly stagnant
Will mortgage rates rise, fall or remain the same? That’s the question of the year in the real estate industry and answers to it are all over the board. Mortgage rates, in a nutshell, are a moving target. About two weeks ago, for instance, the average interest rate on a 30-year fixed mortgage increased by five points (or 0.05 percent).
Freddie Mac’s March outlook predicts that the 30-year mortgage rate should remain below 4 percent at least until June. What happens after that is anyone’s guess. This is important for homeowners planning to sell for two reasons:
1. When rates rise, many buyers drop out of the market.
2. If you plan on buying another home, you, too will be affected by higher rates. The moral of this story? Get out now while the getting is good.
5. Neither are home prices
One thing we do know is that prices are reaching their peak. The folks at Freddie Mac say that home prices this year will reach their highest levels since 2006 but that the price hikes will slow as we edge closer to the end of the year. Price appreciations, they say, will slow to 4.8 percent from the 6 percent of last year.
If you’re trying to time the market – waiting for home prices to reach their peak before selling – quit it! By the time you’ve figured out that it’s getting “better” it’s already happened and you may have missed the highest point. All it will take is a dismal jobs report or slowing housing starts to mess up even the best predictions.
Real estate is not only local, but markets are cyclical. In Madison, this is absolutely the best time to sell.
Posted by Jolenta Averill on