If you have been reading our blog consistently, you know that the last few years have been a “seller’s market.” Rates have remained low, which grants buyers greater purchasing power. Paired with a shortage of homes for sale, this represented the perfect storm for prospective home-sellers. Ultimately, what goes up must come down – there are signs that the market is slowing down. While the market is shifting into the buyer’s favor, it’s not too late for current home owners to benefit from the current market. This article will briefly discuss the various reasons for selling your home in 2019.
There Won’t be a Shortage of Homes for Sale Much Longer
While there is a myriad of factors that go into creating a seller’s market, the major factor is inventory. To put it simply, as long as there are more potential buyers than there are homes for sale, the sellers will be in a superior negotiating position: I have what you want, let’s make a deal on my terms. Thus, when a seller places their home on the market at a reasonable price they can expect numerous bids on their home in a brief span of time. 2019 will bring changes in this department, as the number of houses going up for sale are gradually increasing. As it stands, potential buyers still outnumber available homes; if the trend continues, that won’t remain true for very long.
As Long as the Market Remains Favorable to Sellers, A Significant Return on Investment is Possible
Unless you have been living under a rock, you are aware that housing prices have been skyrocketing since 2012; in 2012 the median home price was $154,700.00. The median home price has nearly doubled over the last 7 years, it is currently $289,300. While the median housing prices in the Sherman Oaks, Encino, and Studio City areas are significantly higher than the national median, the numbers have still increased in a similar fashion. However, that trend is slowing, if not reversing. Home listing prices have dropped 15% in January 2019, indicating rough waters ahead for the home-seller/investor.
Low Mortgage Rates Means Higher Purchasing Power for Potential Buyers
As we have noted repeatedly, the rates on 30-year fixed rate mortgages (“FRMs”) have been decreasing, despite the repeated predictions that the rates would increase, predictions that should be taken seriously notwithstanding the current market. As it stands, low rates also present an opportunity for would-be sellers to “trade up.” Potential buyers have more purchasing power, but so do sellers – particularly when they receive a massive influx of cash to back up their loan application. At the Chernov Team we take pride in keeping our thumb on the pulse of the real estate market, advice is only as good as the information that forms its foundation. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.