For homeowners, the last ﬁve or six years has been a pretty chaotic time.
First came the peak of the housing bubble, followed by its inevitable crash. Millions of homeowners found themselves under the threat of foreclosure while others, who might otherwise have sold their homes during a healthier market, found themselves with few options until the market recovered.
For these homeowners, it is understandable that they’d be hesitant to sell their homes today after the roller coaster of the past few years. However, the reality of today’s market is that home values have increased, in some markets dramatically, and it might just be the perfect time to sell.
Your home might be worth more than you think. Here are three reasons why.
1. There are Fewer Distressed Homeowners
One of the big reasons why prices dropped so dramatically in the ﬁrst place is because millions of homeowners hit hard by the recession and falling prices could no longer afford their mortgage. Facing foreclosure, they attempted to sell only to ﬁnd that the value of their home was less than what they owed.
These homeowners are called “distressed” homeowners, and they’ve numbered in the millions. Today, however, these distressed homeowners may ﬁnd themselves in a much better position!
According to the National Association of REALTORS, distressed sales are at their lowest point since 2008, when the foreclosure crisis started. Because much of the distressed properties have been sold, they are no longer affecting the overall market as strongly. This means that non-distressed sellers today ﬁnd themselves in a much better position than at any point since the housing crisis began.
“According to the National Association of REALTORS, distressed sales are at their lowest point since 2008, when the foreclosure crisis started.”
2. Prices have increased
Many homeowners may not realize it, considering how far the real estate market fell when the housing bubble burst, but in the past 12 months, prices have actually rebounded at a fairly remarkable pace.
In fact, according to the National Association of REALTORS, prices rose 14.5% year over year in June of 2013. This is the biggest yearly increase in prices since November of 2005, when the market was almost at its peak.
For homeowners, this incredible increase in prices means that much of the value that was lost during the housing crisis may have returned and people who have put off selling their homes are beginning to see that selling makes sense again.
For those who were underwater, this is welcome news. These homeowners may very well have equity again for the ﬁrst time in years. For people who had planned on moving up into a bigger home but held off because the value of their current home was too low, these price increases are a sign that it may be time to start considering moving up again. But price increases aren’t only reason why selling today might make sense.
“… These price increases are a sign that it may be time to start considering moving up again.”
3. Housing Inventory is Low, and the Number of Buyers is Growing
Generally speaking, the real estate market needs about six months of inventory in order to keep up with normal supply and demand. This means there should be enough homes for sale that it would take six months to sell all of the homes to buyers.
In today’s market, there is signiﬁcantly less inventory than that. In fact, nationally there is little more than ﬁve months of inventory available. This number doesn’t tell the whole story, however. In some metropolitan areas, there is less than a month of inventory. There are even some cities that only have a few days of inventory for sale!
At the same time, more people want to buy homes today than at any time in the past ﬁve or six years. Interest rates are at near record lows and a new generation of homeowners is trying to buy their ﬁrst home.
The result is a simple supply and demand issue. There are fewer homes to sell and more people who want to buy them. Make no mistake about it, today’s market is a seller’s market and people who sell their home today are in the strongest bargaining position in years.
“… People who sell their home today are in the strongest bargaining position in years.”
You Are in the Driver’s Seat!
If you have been waiting to sell your home, especially if you or someone you know is having difﬁculty with their mortgage, it is time for you to start exploring your options because your home may be worth signiﬁcantly more than you realize. The important thing is to know where you stand.
Do you know what your home is worth today? What are homes in the area selling for? These are all questions to which the answers have changed signiﬁcantly in the last few months and knowing what your speciﬁc situation is will help you make more informed choices.
“… I make it my business to have the most up-to-date information.”
As a real estate agent and Certiﬁed Distressed Property Expert® in today’s market, I make it my business to have the most up-to-date information and can help you understand exactly what your current situation is. If you have been underwater, it is entirely possible you are not anymore. If you have been holding off until the market started to recover, that time is now.
Contact me today for a free market analysis and let me help you determine your best options. Arm yourself with information and make a more informed choice. It might just end up being an incredibly proﬁtable decision.