In 2017, It's a Seller's Housing Market
Posted by Christine Moore on
According to CNBC, spring 2017 was the “strongest seller’s market ever.” Homes that come on the market are being snapped up in record time, even with selling prices at their highest level in years. David Fogg, a real estate agent with Keller Williams, says home sellers are now squarely in the driver’s seat:
"I've been selling real estate for 25 years and this is the strongest seller's market I have ever seen in my entire real estate career. A lot of our sellers are optimistically pricing their homes in today's market, and I have to say in most cases we're getting the home sold anyway."
What’s Driving the Market?
It basically comes down to the old law of supply and demand. When there’s more of a product than there are buyers to purchase it, the price goes down and products are harder to sell. When there’s a shortage of a product and many buyers, the price goes up and the product sells like hotcakes.
That’s what’s happening in the U.S. housing market. According to Realtor, in the first quarter of this year, there were 1.83 million existing homes for sale, down almost 7% from the first quarter of 2016. At the same time, a strengthening economy means more consumers have the means to buy a home. With fewer homes on the market and more people wanting to buy a home, the price goes up. The median price of an existing, single-family home was $232,100 in the first quarter of 2017, 6.9% higher than the same time last year. Joseph Kirchner, a Senior Economist with Realtor, explains the trend:
"Prices are increasing faster than we expected them to because of the continual shortage of new homes coming onto the market. People that had been holding back on buying a home ... now have good, steady jobs and are less worried about losing their jobs and hence are going into the housing market."
It’s Happening from Coast to Coast
Of particular interest to realtors and home sellers is the fact that the trend isn’t confined to a few states or cities—it’s affecting home sales in virtually every state, region and community. For example, the median price for an existing, single-family home in the South increased by 7.9% (to $210,500) in the fourth quarter of 2016 compared to the fourth quarter of 2015. The increase was even higher in the Atlanta-Sandy Springs-Marietta area, where home prices increased by 8.1%.
With a few exceptions, the same is true in virtually every other region, state and community across the country. In Las Vegas, Nevada, for example, home prices increased by 7.1% in 2016 (to a median selling price of $220,500). In Sacramento, California, the increase was even steeper, topping 10%. In Portland, Maine, the price for an existing home rose by 7.1%.
Is Now the Time to Sell Your House?
Realtor answers that question in “Get Moving! 4 Urgent Reasons You Should Sell Your Home in 2017.” The four reasons are:
- Mortgage rates are low: the rate for a 30-year fixed mortgage, although it’s ticked up slightly since October, is still around 4%. That means lower monthly payments and buyers who are eager to make a deal before rates climb higher. That doesn’t mean you need to sell your home today, since rates are expected to remain low through 2017—it does mean you don’t want to wait until rates hit 5%.
- The housing shortage: in 2007, shortly before the housing crash, there were more than 4 million homes on the market—now, there are fewer than 2 million, a drop of more than 50%. That means homes are more valuable, and that they’ll be purchased more quickly—both good points for sellers.
- Home prices are still rising: home prices have now been rising for 57 months, and that trend is expected to continue. If the value of your home dropped during the recession, it’s probably rebounded, increasing your equity and the profit you can make when you sell your home.
- Unemployment is down: with unemployment at its lowest point in more than a decade and wages finally on the increase, more consumers are in a position to buy your home. With more people bidding on your home, you have more leverage in setting the price you want.
This is definitely a good time to sell your home, but according to the experts, it's also a good time to buy. That's because home prices haven't yet peaked, and aren't expected to any time soon. According to Keeping Current Matters, home prices will continue to climb for at least the next five years:
"Home values will appreciate by 4.4% over the course of 2017, 3.4% in 2018, 2.8% in 2019, 2.7% in 2020, and 2.8% in 2021. That means the average annual appreciation will be 3.22% over the next 5 years."
If you live in Atlanta or Sandy Springs, GA, Las Vegas, NV or Manahawkin, NJ and need advice about obtaining a mortgage loan or refinancing your current loan, contact us today.