It may be the winter (and a cold one this year), but the real estate market is heating up!
Homes are selling quickly and closer to (or above) asking price. According to the January 2018 REALTORS® Confidence Index Survey, “34% of properties that closed in January sold at or above the list price. Of the properties that sold at a premium price, 86 percent sold at 101 to 110 percent of the list price.”
So, what factors are pushing prices higher?
Low Inventory
A normal housing market has a 6-month supply of houses. Our current market only has a 3.9-month supply.
What does this mean?
There are not enough homes for sale on the market to satisfy the number of buyers.
High Demand
Buyer demand is strong and outpacing the supply of homes on the market.
What does this mean?
There are more buyers searching for houses than homes available for them to purchase.
Competition
Limited inventory means buyers are competing for the same home, resulting in multiple offers on a single property which ultimately drives up the sales price.
What does this mean?
If you are looking to buy a home, be ready to act fast. When you find the right house, you may not have time to sit around and think about your decision.
If you are an investor, your offer will most likely need to be for cash with a quick settlement and free of contingencies. I recently had an investor-friendly listing that was on the market for 3 days, had 29 showings, received 11 offers and sold for 11% over asking price!
Increasing Mortgage Rates
Most industry experts predict that interest rates will rise over the next year.
What does this mean?
An increase in rates will increase a buyer’s monthly mortgage payment. Buying now while rates are still low will save new homeowners money on a monthly basis.
If you would like to sell your home, buy a home, or add to your real estate investment portfolio, please consider the services that I can offer, read testimonials from past clients and call or email me today!