Two Reasons to Sell Your Home this Winter
The best time to sell anything is when demand is high and the supply of that item is limited.
The last two major reports issued by the National Association of Realtors (NAR) revealed information that suggests now is a great time to sell your house.
NAR PENDING HOME SALES REPORT:
The report stated pending home sales (homes that are under contract) are up 3.9% over last year, and have increased year-over-year for 14 consecutive months.
Lawrence Yun, NAR’s Chief Economist, expects demand to remain stable through the final two months of the year, and “forecasts existing-home sales to finish 2015 at a pace of 5.30 million – the highest since 2006.”
Takeaway: Demand for housing will continue throughout the end of 2015 and into 2016. The seasonal slowdown often felt in the winter months hasn’t happened and probably won’t happen.
THE EXISTING HOME SALES REPORT:
The most important data point revealed in the report was not sales but rather the inventory of homes on the market (supply). The report explained:
- Total housing inventory decreased 2.3% to 2.14 million homes available for sale
- That represents a 4.8-month supply at the current sales pace
- Unsold inventory is 4.5% lower than a year ago
There were two more interesting comments made by Yun in the report:
1. “New and existing-home supply has struggled to improve, leading to few choices for buyers and no easing of affordability concerns still prevalent in some markets.”
2. “Unless sizable supply gains occur for new and existing homes, prices and rents will continue to exceed wages into next year and hamstring a large pool of potential buyers trying to buy a home.”
Takeaway: As rents and prices increase, potential buyers will not able to save as much for a down payment. Many buyers may become priced out of the market. Inventory of homes for sale is still well below the 6 months needed for a normal market. Prices will continue to rise if a ‘sizable’ supply does not enter the market.
As a general real estate guideline:
- When there is less than 6 month’s inventory available, we are in a sellers’ market and we will see appreciation
- Between 6-7 months is a neutral market where prices will increase at the rate of inflation
- More than 7 months inventory means we are in a buyers’ market and should expect depreciation in home values.
Real Estate Bottom Line
If you are going to sell, now may be the time. Take advantage of the ready, willing, and able buyers still out there looking for your house.