Given the current state of the real estate market, it is a good time to sell a home. Here are 4 reasons you should sell your house.
1. Significant Equity Gains
Since the real estate market started to recover in 2013, there have been significant gains in home values across the United States.
This infographic shows the year-over-year gains in home values each month going back to 2013:
The impact rising values has had for home owners over the last few years has been an increase in equity.
After the real estate crash many home owners saw their equity evaporate, and many home owners were left in a negative equity position.
Selling a home simply was not an option, unless you wanted to do a short sale.
For the home owners that weathered the storm, they now sit in a comfortable position.
Nationwide, homes have seen significant increases in equity.
In fact, the majority of home owners across the country now have significant equity (greater than 20%) in their homes.
Despite this fact, many home owners are simply not aware of the equity they have.
In fact, according to the most recent numbers from CoreLogic, nearly 80% of homes across the country now have significant equity:
Home owners that sold their homes recently realized something else significant.
They realized the largest price gain since 2007:
2. Demand Is Strong
Demand for housing remains very strong, and that doesn’t look like it will slow down anytime soon.
The biggest influence on rising home values has been a lack of inventory to meet this demand.
Here is a look at the most recent Average Days On The Market (DOM) report from the National Association of Realtors (NAR) for homes on the market:
Homes are selling fast. This is definitely a seller’s market.
The best time to sell your house is in a seller’s market.
The Months Inventory of homes for sale continues to remain well below where it needs to be for a balanced market:
Despite the need for more inventory, over the last 12 months we have actually seen inventory levels decline in their year-over-year numbers:
In fact, Inventory levels have dropped so far, we are seeing the lowest inventory levels in 30 years:
Inventory levels have receded to historical lows:
3. Interest Rates
One concern for the real estate market at the beginning of 2017 was interest rates.
Increasing interest rates could impact the market in two ways.
For buyers, a rise in rates could put a damper on demand.
However, it would take a significant increase (1% or greater) before that really has an impact.
For sellers, it could have an impact on whether or not to sell your house because of what is known as interest rate lock–if your current mortgage rate is significantly lower than the going rates, than many home owners would simply stay in their current home and reap the benefits of the lower interest rate.
However, interest rates have not been a (negative) factor thus far in 2017, because they remain very close to their historic lows:
2016 saw the lowest recorded Average Annual Interest Rate since Freddie Mac began tracking them in 1971:
The unbalanced demand for housing along with historic lows of inventory make this a great time to sell your house.
As an added bonus, you can also take advantage of historic low interest rates when buying your next home.
4. Sell My House? What About The Bubble?
After watching the big market boom in the early 2000s and the resulting crash, many people fear that we are heading for another crash.
There are many reasons that we are not in another real estate bubble, and I have covered this before.
But, simply put, this market is different than the last market. Very different.
The fact remains, many home owners now fear that we are going to see home values come crashing down in the next couple years.
So, let’s play Devil’s Advocate and say that they indeed will plummet.
What will happen to all of that equity current home owners have in their homes?
According to the infographic above, home owners saw a $51,000 gain in their homes in the second quarter of 2017.
If home values crash, then many homeowners will see all of their equity vanish with it.
Whether that is $10,000 or $50,000, all of that is gone.
How can home owners avoid losing that significant amount of money?
They could simply stay in their current home, and refinance the mortgage and pull that equity out.
However, it is important that they use that newfound gain in a financially responsible way.
Part of what led to the previous crash was home owners refinancing their homes and cashing out their equity gains and using their homes like an ATM.
This money was used for frivolous things like vacations, jet skis, new cars, etc.
But, if this money were to be used for some sort of investment, then current home owners could reap the benefits and not lose this equity.
However, what could be a better investment than real estate?
According to the most recent Gallup poll, American’s still believe the best long term investment is real estate:
Another poll shows that nearly 85% of American’s feel buying a home is a good investment:
Th retail side of real estate is not the only segment of the market doing well.
The rental market has seen rents skyrocket, along with a limited inventory of available rentals:
If the market were to crash, what do you think that would do for the demand for rentals?
And where do you think the average rent will do over the next few years regardless of what happens?
History tells us that rents will go up, not down:
But what about a loss in home value (due to the crash)?
Well, if we are going to make believe that history will repeat itself with a market crash, then we have to make believe that we will also see a significant recovery, similar to what has happened over the last 4-5 years.
So, by using the equity gained (which is real) to buy this investment home, the loss in value is offset.
During the dark years you will see monthly cash flow.
In about 10 years the market will recover, and you will be looking at a $50,000 gain in equity.
Sell Your House, Reap The Rewards
Bottom line there may not be a better time in history to sell your house. Not only can you sell your house, but you can sell your house fast.
Cash out now, and find your dream home.
Whatever home you move on to, you can feel confident that you will also see a gain in value as well over the next few years.
According to the most recent Home Price Expectation Survey, home values should increase over the next 5 years:
The market needs more inventory. If you have thought about selling your house, then this is the perfect time to do so.
If you would like to sell your house, and you want to sell your house fast, then download one of my free home seller’s guides:
Stay tuned to the latest real estate news, trends, and stats at this blog or this blog.
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Be sure to visit my website for more information about how to sell your house.
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