It seems every time we turn around there's another crazy real estate story about the home down the street that sold for $65,000 over asking price with nineteen offers -- with a leaky roof and foundation issues! To say that the real estate market is a bit like a three-ring circus these days is really a bit of an understatement. But, with the right guidance from a professional, buyers AND sellers can make the important real estate decisions they are considering with confidence.
There are actually a number of reasons to pull the trigger and get a For Sale sign in your yard in the first quarter of 2022. One thing to keep in mind is that you (the seller) are in the driver's seat from the time you sign a listing agreement through closing day. I always advise my clients to keep in mind BOTH sides of the transaction in order to ensure fair and reasonable negotiations, but right now we all can agree that seller's have the upper hand and here are some reasons why:
High Demand = High Prices: Depending on where you live, home values have increased as much as18% in the past year. Inman states that these increases in value are NOT due to inflation, but rather a ripple effect of the market crash in 2007. Home builders pumped the brakes on new construction and pre owned home sales tanked. The market recovery been chugging along for years and has hit its stride. To make things even more interesting, the number of homebuyers in the market is at a historical high. With more and more people working from home, seller in what used to be less desirable locations (suburbs, etc), are reaping the benefit of motivated buyers who have the flexibility to reside just about anywhere. These and other factors have led to our incredible shortage in homes available and have driven prices up dramatically- a huge win for sellers hoping to liquidate their equity and cash in big time.
Buyers willing to "pay to win" in multiple offers: Much as it makes most realtors a little uncomfortable, the fact of the matter is that we must set realistic expectations for our buyers. According to the National Association of Realtors, homes in America average FOUR offers upon becoming an active listing. Considering that this is an average, we must factor in geographical area (many areas are in extremely high demand with an extreme shortage), price point, home condition etc. Your Transcend DFW Realtor can offer data on the demand (and likely buyer response) to YOUR home in YOUR market. Our experience with sellers is that they are often pleasantly surprised not only at the current value of their home, but the incredible demand. And, if cashing in on this seller's market by selling at an all-time high isn't enough, buyers who "win" in multiple offers are generally paying costs that traditionally have been seller costs (title policy, survey, etc), thus adding more the the bottom line earnings for our sellers.
Interest Rates are on the RISE: Though home prices are NOT considered when determining national inflation rates, they are a by-product of inflation in the general economy. Mortgage interest rates ARE impacted by inflation and we are about to see it first-hand. As interest rates AND home values rise, the buying power our buyers possess will diminish. Because interest rates are expected to take a jump going forward in 2022, the impact will be felt for our buyers. For the sake of illustration, here is what the rise in interest rates will look like for the average $300,000 home buyer. In January of 2021, a well-qualified buyer could expect an APR of 3.076% and a payment of $1939.00/mo with 10% down. Currently, in 2022, the same buyer is looking at an APR of 4.1% and a payment of $2084/mo. In just ONE short year, the same buyer will be looking at an APR in the neighborhood of 4.467% and a payment of $2038/mo. which is approximately $200 more per month than just a year ago! This will likely cause home values to become more stable, buyers to slow their roll (and/or opt for more affordable homes), and perhaps begin a shift toward a market that isn't so brutal for buyers (and is less profitable for sellers).
Interest Rates are on the RISE: What? I just said that! Well, as sellers, we need to prepare to put on our "buyer" shoes and saddle up for that ride. If making a move by selling your home is in the cards for you, and you intend to make a purchase, you too will face higher interest rates in the coming year. If you have not refinanced in recent years, it is likely that selling your current home and purchasing your next home could actually yield a LOWER interest rate for you and savings in the long run! I find that many of my sellers are currently in a mortgage with an interest rate far higher than current rates- for now. Taking the cash from selling your home and investing in your next home with a potentially lower interest rate could be a huge win for many sellers.
Let Us Help! At Transcend DFW Properties, we strive to be your community go-to for all things real estate. We have MANY clients who reach out regularly needing guidance from property taxes to roofing issues and all things in between. Much as we LOVE being the very best in marketing homes for sale and helping our buyers find just the right spot, we know that sometimes our clients just need direction in finding answers to questions that impact their greatest investments. So-- please don't hesitate to reach out TODAY to see if selling your home is a wise choice for you. You can take comfort knowing that we will offer information and data to you that you can use to make a smart decision! Happy 2022 and thank you for making Transcend DFW Properties YOUR real estate resource.
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