The seller’s market for homes is expected to continue at least through the first half of 2018 and may extend beyond that if the homes-for-sale inventory doesn’t improve.
House price appreciation over the past two or three years has been around 5% to 6% nationally and far higher in some metro areas — Seattle, San Francisco and Denver, for example. That level of appreciation simply can’t go on forever. And according to economist Herbert Stein’s famous dictum, if something can’t go on forever, it won’t.
Holly Amaya at Realtor.com sums up the current situation this way:
Today’s buyers are exhausted. And in many cases that means they’re willing to sacrifice to get a toehold in the market. Sounds like the stuff of seller’s dreams, right? But know this: If you plan to sell in 2018—and you want to unload your home quickly and for maximum money—your window of opportunity may be rapidly narrowing.
Amaya lists five reasons to get moving and sell your house now if it is your intention to sell in 2018.
Mortgage interest rates are still historically low. A few years ago interest rates had dipped below 3.5% for 30-year conventional fixed-rate mortgages. Right now, rates are around 4.5%, and that remains a very good deal. By the end of this year, rates could average 5.0%, and they will continue to rise slowly all year.
Inventory is still tight and demand is still high. When housing inventory is tight and demand is high, the result is often a bidding war for a house. There are also a lot of cash buyers (investors mostly) looking to buy. Online real-estate listing firm Zillow has just announced it will buy and flip houses in the Phoenix and Las Vegas beginning later this spring. The inventory situation is expected to ease beginning late this year, so selling now is likely your best shot at a premium price.
House prices continue rising. Prices are continuing their upward movement, but appreciation this year is expected to be around 3.2%, compared with a 5.5% gain last year. You might give up a little in profit by selling now, but the way the stars are aligned now won’t be the same as in December.
People have more cash now. Incomes are rising as the U.S. unemployment rate remains near 4%. Most people also will be seeing more money from their take-home pay as the new tax legislation kicks in. Consumer confidence is pretty strong too, so the combination here is all to a seller’s benefit.
Millennials are ready to buy. Realtor.com reckons that millennials will account for 43% of all new mortgages in 2018. As the older portion of this age group hits their 30s, they begin looking at buying instead of renting. That means a lot of new buyers in the market, a good thing for sellers.
Visit the Realtor.com website for more details.