Great time for sellers AND buyers
When it comes to real estate, is it possible to have the best of both worlds, that is, have a great time to sell your home and a great time to be a buyer? I think the answer is yes, and I think that time is now.
For buyers, aside from specific property characteristics, a main factor is the mortgage interest rate.
For sellers, it is selling their home for the highest amount, in the shortest amount of time, with the least hassle. Buying with the lowest historical interest rate or selling at the absolute peak of home values are feats usually accomplished with a good measure of luck.
Even the most seasoned "expert" has, at best, a cloudy crystal ball.
Looking at empirical data supplied by the National Association of Realtors, existing home sales statistics and the Case-Shiller Home Price Index, it is clear that 2011 marked the low point for home values.
With hindsight being 20/20, this was clearly the optimum time to purchase a home. By the time the data became available, indicating we had "hit the low point," it was a little late.
A huge wave of buyers entered the market and that included investors with a lot of cash. Late in 2011, through 2012 and 2013, investors were buying up properties, to the extent that more than 40 percent of all property sales in the first quarter of 2013 were purchased by investors and about 50 percent of sales were all-cash!
This was very discouraging to traditional buyers losing out on properties to the all-cash investor. Also, at the beginning of 2013, the government placed significant restrictions on lenders' ability to foreclose on homes, which led to very low inventories of homes for sale.
This lack of supply and high buyer demand significantly drove up home prices, to where home affordability is tightening up.
For buyers, I think now is a great time to get into the housing market. The rise in home values had chased off most all-cash investors, creating a more "normal" market when submitting offers.
Rates are still at historical lows, and with the Federal Reserve steadily reducing their bond buying program of Quantitative Easing, rates are expected to rise through 2014. Based on the volatile rise of 1 percent we saw in the month of May 2013, another 1 percent rise in interest rates can lower your purchasing power significantly. Additionally, we have seen an increase of 1,700 in the number of properties for sale to 5,844 active listings in January 2014 compared to January of 2013.
As for sellers, I think now is also the best time to sell. There is still significant buyer demand, and if you will be buying a replacement property, those low interest rates will also benefit you! Additionally, values have increased significantly in the past 2 years, although home values flattened out in the 4th quarter of 2013 and in January of 2014 median home values actually declined. So listing your home now when inventory is low, rates are low, demand is high and before more inventory comes on the market is a very smart play.
I think 2014 can be very fruitful for both buyers and sellers. But NOW is the prime time for sellers to list their home for sale and for buyers to start writing offers.
When it comes to real estate, is it possible to have the best of both worlds, that is, have a great time to sell your home and a great time to be a buyer? I think the answer is yes, and I think that time is now.
For buyers, aside from specific property characteristics, a main factor is the mortgage interest rate.
For sellers, it is selling their home for the highest amount, in the shortest amount of time, with the least hassle. Buying with the lowest historical interest rate or selling at the absolute peak of home values are feats usually accomplished with a good measure of luck.
Even the most seasoned "expert" has, at best, a cloudy crystal ball.
Looking at empirical data supplied by the National Association of Realtors, existing home sales statistics and the Case-Shiller Home Price Index, it is clear that 2011 marked the low point for home values.
With hindsight being 20/20, this was clearly the optimum time to purchase a home. By the time the data became available, indicating we had "hit the low point," it was a little late.
A huge wave of buyers entered the market and that included investors with a lot of cash. Late in 2011, through 2012 and 2013, investors were buying up properties, to the extent that more than 40 percent of all property sales in the first quarter of 2013 were purchased by investors and about 50 percent of sales were all-cash!
This was very discouraging to traditional buyers losing out on properties to the all-cash investor. Also, at the beginning of 2013, the government placed significant restrictions on lenders' ability to foreclose on homes, which led to very low inventories of homes for sale.
This lack of supply and high buyer demand significantly drove up home prices, to where home affordability is tightening up.
For buyers, I think now is a great time to get into the housing market. The rise in home values had chased off most all-cash investors, creating a more "normal" market when submitting offers.
Rates are still at historical lows, and with the Federal Reserve steadily reducing their bond buying program of Quantitative Easing, rates are expected to rise through 2014. Based on the volatile rise of 1 percent we saw in the month of May 2013, another 1 percent rise in interest rates can lower your purchasing power significantly. Additionally, we have seen an increase of 1,700 in the number of properties for sale to 5,844 active listings in January 2014 compared to January of 2013.
As for sellers, I think now is also the best time to sell. There is still significant buyer demand, and if you will be buying a replacement property, those low interest rates will also benefit you! Additionally, values have increased significantly in the past 2 years, although home values flattened out in the 4th quarter of 2013 and in January of 2014 median home values actually declined. So listing your home now when inventory is low, rates are low, demand is high and before more inventory comes on the market is a very smart play.
I think 2014 can be very fruitful for both buyers and sellers. But NOW is the prime time for sellers to list their home for sale and for buyers to start writing offers.