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What You Need To Know About Selling in a Sellers’ Market

Beyond Realty

Real Estate

What You Need To Know About Selling in a Sellers’ Market

Darren Dowling covers What you need to know about selling in sellers’ market.

Even if you haven’t been following real estate news, you’ve likely heard about the current sellers’ market. That’s because there’s a lot of talk about how strong market conditions are for people who want to sell their houses. But if you’re thinking about listing your house, you probably want to know: what does being in a sellers’ market really mean?

What Is a Sellers’ Market?

The latest Existing Home Sales Report from the National Association of Realtors (NAR) shows housing supply is still very low. There’s a 2-month supply of homes at the current sales pace.

Historically, a 6-month supply is necessary for a normal or neutral market where there are enough homes available for active buyers. That puts today deep in sellers’ market territory (see graph below):

What You Need To Know About Selling in a Sellers' Market | MyKCM

What Does This Mean for You When You Sell?

When the supply of houses for sale is as low as it is right now, it’s much harder for buyers to find homes to purchase. That creates increased competition among purchasers which can lead to more bidding wars. And if buyers know they may be entering a bidding war, they’re going to do their best to submit a very attractive offer upfront. This could drive the final price of your house up.

And because mortgage rates and home prices are climbing, serious buyers are motivated to make their purchase soon, before those two things rise further. That means, if you put your house on the market while supply is still low, it will likely get a lot of attention from competitive buyers.

Bottom Line

The current real estate market has incredible opportunities for homeowners looking to make a move. Listing your house this season means you’ll be in front of serious buyers who are ready to buy. Let’s connect so you can jumpstart the selling process.

What You Need To Know About Selling in a Sellers' Market | MyKCM

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Why Most People Are Still Glad They Bought a Home With everything going on, it’s understandable if you’re wondering if you’d regret buying right now.  Everyday expenses cost more. Mortgage rates are higher than you’d like. And when the economy feels uncertain, taking on a mortgage can feel like a much bigger leap. But here’s some perspective that may help… Most people who already made that leap would do it again. According to a recent survey from NerdWallet, the vast majority of recent buyers (74%) were glad they bought their current home. Only a very small 3% of people regret it: And here’s a big reason why so many people feel it was worth it, even now. Homeownership Is a Long-Term PlayWhen you’re deciding whether to buy, it’s easy to focus on what’s happening right now. What’s today’s mortgage rate? Are prices going up or down? Those things matter. But don’t get so caught up in buying in the perfect moment that you miss the bigger picture. A home isn’t typically something you buy for just a year or two. It’s a longer-term play. And when you zoom out, it all starts to fall into perspective – especially if you look at home prices and equity. According to data from the Federal Housing Finance Agency (FHFA), home prices nationally have risen 33.4% over just the past five years (see map below): And that appreciation has helped current homeowners build some serious wealth. Research from Bankrate shows homeowners gained an average of nearly $150,000 in wealth over the past five years as equity steadily rose across 90% of major metro areas. That’s one of the biggest benefits of homeownership. As you pay down your mortgage and your home appreciates over time, your ownership stake – your equity – can grow. Now, Zoom Out Even FurtherThe five-year numbers are impressive. But the numbers get even more dramatic when you look at decades instead of individual market cycles. FHFA data shows home prices nationally have risen 336% since 1991. Sit with that for a second. Three hundred percent (see map below):   That doesn't mean prices go up every single year. And it doesn't mean buying is automatically the right decision for everyone today. You should only buy when the numbers (and the payment) work for you. What it does show is why trying to perfectly time the market can make you miss the bigger picture.  Over time, homeowners gain a lot of equity. And that equity can eventually become a powerful financial resource. As Freddie Mac explains:  “Your home's equity is part of your total wealth as a homeowner. If you decide to sell your home, the equity you have built over time will come back to you in the sale. . . If it's time to upsize or downsize, you can use that cash for the down payment on your next home.” Basically, if you can afford to do it, buying a home now could set you up for future moves. And just in case you’re someone who’s worried about what happens if prices do fall, after you buy, remember: you’re not buying for one year. Prices can dip. They have before. But historically, they’ve risen far more over the long run. And the longer you own your home, the more time you have to ride out those ups and downs and keep building equity. Bottom LineDon’t let today’s uncertainty make you lose sight of what homeownership can do over time. Most homeowners say they’d make the same choice again. And decades of home-price growth help explain why. If you’re wondering whether buying makes sense for you right now, let’s look at the numbers together – and what owning a home could mean for you in the years ahead.

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