Don't Wait to Sell Your Home - Take Advantage of this Seller's Market

Harcourts North America
August 23, 2021

The real estate market is buzzing. We know this. People buy houses as soon as the "For Sale" sign is hammered into the front lawn (if the listing even makes it that far). Never has demand for homes been so high, supply been so low, and interest rates available for qualified buyers been so incredible. And this isn't a flash in the pan. The market has been like this for some time.

There was speculation when COVID struck that it was going to sink the market. That COVID would be its kryptonite. It didn't happen. If anything, the market got stronger. But the truth is, it won't remain like this forever. Sooner or later, interest rates are going to go up. Meaning that if you are thinking of selling your home, do not wait another minute. We are living in the hottest seller's market in history, and the last thing you want to do is wait a day longer and lose out on making more money for your property.

If you find yourself trying to understand why, exactly, the market is so hot for sellers right now, allow us to explain:

Sky High Buyer Demand

These days, it is not uncommon to hear a story about someone putting an offer on a home but having to compete with five, ten, or even twenty other buyers. It can make the process of buying a home both competitive and stressful, but it's the perfect storm as a seller. With interest rates at an all-time low, qualified buyers are on the hunt for properties and are willing to spend more than they usually might at this time. The other factor that has resulted in so many buyers seeking out new homes is COVID-19. With many companies adapting to the situation by keeping their teams working remotely from home, it has given people the opportunity to live anywhere in the country while still maintaining the same job. So, for some people, if you are making a Los Angeles salary but now have the freedom to live elsewhere, you can get a lot more space for your money in places like Orange County, Bend, or Las Vegas.

Lack of Inventory

A supply and demand issue is currently happening. Part of the incredible demand for houses is the historically low supply of inventory. Just last May, the number of available homes in the United States was down more than 43% compared to previous years. That's roughly 415,000 fewer properties than there would be in other years prior. But why? Once again, there are multiple reasons behind this shortage.

  • Before the Pandemic, starter homes were a hot commodity amongst Millennials. Upon finishing construction of the homes, people quickly bought them up, resulting in a shortage of homes at that price point.
  • With interest rates hovering around 3%, people who might typically sell their home when deciding to move are now holding onto it and keeping it as an investment property.
  • Due to COVID-19, construction costs have skyrocketed. The market now sees that homes aren't getting built as expeditiously as they usually would in the current climate.

Any one of these factors would make buying a home more competitive, but to have all three? If you have a home to sell, you have the supply that so many others demand.

So, Why Now?

You may wonder, "Why the rush? The market has been hot for over a year, and surely I can wait a few more months before I sell." And that's true! But in our humble opinion, in doing so, you risk leaving significant money on the table. It would not surprise us in the least to see these ultra-low interest rates begin to rise as early as this fall. Nothing as dramatic as in 2008-2009, but one must understand that as interest rates increase, so do one's own mortgage payments. With higher mortgage rates, buyers can afford less. When buyers can afford less, they are more cautious with their purchases. As crazy as it may sound, with a slight jump in the interest rate, the entire seller's market will shift.

Finally

The real estate market has always been and will always be fluid. It can be challenging to pin down exactly where market trends take us in the future. Real estate agents and brokers can make an educated guess, but it is still just that, a guess. But with the market as hot as it is today, we are confident in saying that this is the best seller's market we have ever seen and might ever see. We are also confident in saying that it will not be this good forever. Eventually, it will change. The frenzy of buyers outbidding one another for a home will shrink. The willingness to make offers significantly over the asking price won't be as commonplace. Though we are confident in selling your house for top dollar, the market will always dictate the amount. So, allow us to appeal to you: if you are reading this from the comfort of a home you are considering selling, now is the time to act.

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