Markets go up. Markets go down. Markets react. Markets change. Knowing all of this, it makes you wonder what sellers are waiting for! Where are all the sellers? All we hear about in most real estate markets is about the lack of inventory. We hear that sellers are still stung by the real estate correction and waiting “a bit longer” for values to recover before selling. I would advise sellers that are thinking of selling, to repeat the above statements about the market a few dozens times, and then call a Realtor and list their property for sale.
A perfect example of how markets react, change and fill holes is found in articles I have been reading recently about the resurgence of new home construction, as well as by investors who are buying, renovating and flipping properties. Just turn on HGTV and check out the shows! In other words, builders and investor/flippers are stepping in where the average seller will not! That is a signal to sellers that the market will find housing without them.
Sales of new homes in the US are surging. Builders are business people, they identify opportunities, and they are forward looking. New-home sales rose 18.5% compared to a year earlier. Sales of previously owned homes has actually fallen 20% in the Western region of the US because of lack of inventory. What is even more striking is that this difference in sales exists even though a typical new home costs 37% more than one already built. Builders are responding to buyers needs! Where are the sellers of existing homes?
Nearly one in four homeowners and renters say now is a good time to sell a home, according to a survey released recently by Fannie Mae. What are you waiting for…sellers? The economy almost collapsed 5 years ago. Real estate got severely damaged. We have seen a lot of recovery and strength.
And as far as timing, I’d sell now. Don’t wait for “when you have time to repaint the bedrooms”, or for spring, or the summer when the flowers are in full bloom. Inventory is low now; buyers are frenzied for inventory now. While trends certainly vary by region, according to a Trulia study, buyer search activity generally peaks in March and April, while seller listings peak in July. Most sellers would be better off if they pushed the process to now. Sellers could face problems if mortgage rates jump or the economy worsens. And let’s face it, at some point the supply of homes for sale will increase.
Sellers would be wise to be forward thinking, and realize that markets are reacting, people will buy a new home with or without them, other sellers may beat them to the punch, and most importantly that real estate prices which have been strong and rising. So my advice to sellers is, “inventory is low, prices are going up, sell now while things are strong.”