01
Aug, 19

Why it's a Great Time to Sell
By rezlist-chime-me August 01, 2019

 

Timing the market is difficult in any money-making situation, whether it be with stocks, cryptocurrency or your own real estate. With real estate, it may never feel like the right time to sell while you continue to compare your house to other sale prices and current listings, however, the current economic climate serves as good a time as ever to consider listing your home. 

Let’s explore the current climate being in your favor. 

Interest rates are as good as they’re going to get

November of 2016 was a great month to buy a home, locking in an average interest rate of 3.57% on a 30 year fixed rate mortgage, the lowest average rate in the last three years according to Freddie Mac. As of this month, interest rates have crept downwards to 3.75%, only 18 basis points above the three-year low achieved in 2016. 

In the midst of the Federal Reserve Meeting on July 31, forecasts state that the current rates are the lowest we’ll achieve for the foreseeable future, with small movement throughout the rest of 2019 followed by a significant increase throughout the first quarter of 2020 into low 4% territory. 

As a seller, taking advantage of current rates broadens the potential buyer pool, allowing shoppers to be slightly more bullish on higher asking prices and bid-wars. 

Does this formula look familiar? 

M = P[i(1+i)

Whether or not this rings a bell, we’ll save you the trouble of reliving high-school math and leave you with $58.69 and $21,128. On a $300,000 home with 20% down, you can expect to save $58.69 per month with a 3.57% interest rate (today’s average) vs. a 4.00% rate. Over the life of those same loans, a buyer can expect to save $21,128 when locking in a 3.57% rate vs. 4.00%. 

With recent events, rates have the potential to dip even further, creating an even bigger pool of potential buyers. 

Home prices have yet to steadily decline

Unlike the last recession, anything that takes place in the near future most likely won’t be caused by a housing bubble, as other culprits such as oil price and fed activity remain above the housing market for purported recession starters. 

With that, a rapid decline in housing prices isn’t projected to take place, however, the sooner you’re able to capitalize on the sale of your home the better your potential for the most earnings possible. 

In the Phoenix metro area, the average home sale price has increased by 5.1% year-over-year to $350,600, while the median sale price grew by 4.4% to $279,900. 

Although total and new inventory continues to drop, down 10.2% and 2.1% respectively year-over-year, average sale prices are projected to drop in the near future, with median sale prices projected to rise slightly. 

San Diego spells out a more expensive story, with a larger median housing price increase to $575,000, a 4.5 percent year-over-year increase. The median price gets even larger for single-family homes alone, locking in a median sale price of $645,000, a 3.4% year-over-year increase. 

With new listings and inventory down along with an increase in average/median sales prices year-over-year in both Phoenix and San Diego, supply continues to tick downwards as prices inch in the opposite direction. 

Listing your home in the near future to take advantage of current interest rates and prices would allow you to stay ahead of potential housing price drops and rising interest rates throughout late 2019 and 2020. 

 

 

 

 

 

 

 

 

 

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