| If you have been thinking about selling your home but weren’t sure when to do it, there may not be a better time than now.To be sure, the decision to sell your home greatly depends on your own personal circumstances. However, several factors have combined to make this a good time to think about the possibility of jumping into the market especially if you have been cautiously sitting on the sidelines.A shortage of listings has created a seller’s marketOver the past few years, the inventory of homes for sale has steadily shrunk – even as the demand from buyers has grown. Nationwide, total inventory stands at a 4.4 month supply, according to the National Association of REALTORS®. But in some of our local markets, available inventory is even lower – in some cases just one to two months supply. To put that in perspective, a balanced market should have approximately six to eight months supply.
We thought inventory was low last year at this time and couldn’t imagine inventory getting a whole lot lower, but that’s exactly what we’re seeing right now. In some areas of Northern California it’s running almost half of what it was a year ago. In the Sacramento Tri-County area, the number of active listings tumbled 33 percent in February from a year ago to 3,463 units, down from 5,179 in February 2015.
Real estate has always been a business of supply and demand. In our market we’ve seen home price increases and multiple offers on many homes – some even significantly above list price. A scarcity of homes on the market pushed home prices in the greater Sacramento area to new post-recession highs last month with the average sale price in the tri-county region jumping 7 percent from last year to $353,000.
Higher mortgage interest rates may be coming
While mortgage interest rates remain close to historic lows, some industry experts are warning that interest rates will gradually begin to climb. In December, the Federal Reserve raised its key interest rate for the first time in nearly a decade and the Fed has signaled it plans to raise rates yet again this year.
The prospect of higher interest rates could actually work to a seller’s advantage – in the short term, at least – by prompting would-be buyers to get into the market before rates go up even further.
“When interest rates are thought to be escalating, we see a wave of activity with people getting off the sidelines,” said Budge Huskey, President and CEO of Coldwell Banker Real Estate.
Now’s the peak season for selling a home
Homebuyers may want to minimize competition when they hunt for a home in a tight market, but for many sellers, the more buyers the better. According to realtor.com’s analysis of sales, the prime home-buying season begins in April and reaches its peak in June.
Sellers who list their home during the prime spring and summer months benefit from a larger population of buyers and potential bidding wars, which often result in higher prices and faster closings, NAR said in a recent economic report.
Soaring rents prompting more renters to think about buying
Home prices have certainly been rising, but rents may be rising even faster in those cities that are not impacted by rent-control laws; that could motivate tenants to consider home ownership. According to NAR®, rent prices have risen 15% nationwide in the past five years in 70 metro areas across the U.S..
“Every time there’s an increase, it triggers the decision processes on whether [renters] should go into the market and buy,” said Huskey. Getting more buyers into the market, especially first-timer homebuyers, can help sellers feel more comfortable about their prospects. “It allows others to move up the chain in the market.”
While this may be a good time to sell your home, the ultimate decision is a complicated one. You will undoubtedly have lots of questions – how much your home might be worth, how best to market it, and, if you’re staying in the area, where to look for your next home. I’m ready to answer all your questions about selling your home and the next steps that will follow after that decision is made. Please give me a call or send me an e-mail and we’ll get started today! |
www.Facebook.com/ElkGroveRealEstate. For information about properties available for sale and for more information for buyers and sellers, please visit our website at www.ElkGroveRealEstate.com and don’t hesitate to give us a call or drop us an email with your questions. 
