Now is the Time to Decide
Now is the time to decide if you will take part in what will become one of the best real estate years on record. That’s right. With wages finally seeing a rise, unemployment at an all-time low, interest rates still below historic levels and home prices still within reach, this is the time to make your play in the real estate market and to #StopLivingOnPause waiting for “the next big market.”
The housing market has been in recovery for the better part of the last 7 years after the market BOOM (2004-2007) and unprecedented CRASH (2008-2011). Most markets are now at or above pre-BOOM/CRASH prices, and the biggest difference why today is healthy is not due to the subprime mortgage and “no cost” or “no down payment” loans that caused the crash, it is because interest rates make affordability possible to purchase and more importantly – to AFFORD every month.
For the first time in our nation’s history the average price for a single-family home (SFR) went above $400,000 to $402,000. This is about eight times the average annual household income. So, for those of us who live in markets such as those in Arizona, Sacramento, CA, Nevada, Washington and Utah, the affordability of a home is truly reasonable and within reach as the average home price in these markets tends to be between $275,000 and $350,000. (All markets served by agents in the PressPlay Realty Network).
What does this mean for Buyers and Sellers?
Often when we see prices going up, buyers get concerned that it means they will overpay for a home, a completely valid concern considering the BOOM/CRASH. As noted previously though, the affordability for buyers today is far better than during the BOOM when average mortgage rates ran nearly 7% compared to today where we are still around 4%. For a home that costs the average price of $300,000 today, that would be a monthly payment of $1,996 in 2006 vs $1,432 today. That is savings of – $564! For this reason, we have been locked in a “Seller’s Market” for nearly 15-straight years.
Buyer are out there in the market ready to buy and ready to spend. In fact, markets like Phoenix, AZ saw buyer demand increase by 25% in 2017 vs 2016 and was one of many reasons Phoenix was predicted to be the #1 real estate market in 2017. The hot markets for 2018 include Las Vegas, NV, Sacrament, CA, Seattle, WA and Salt Lake City, UT.
Sellers are also taking advantage of the abundance of buyers and are selling their properties at 97-98% of list price. In some areas, such as Seattle, WA, it is not uncommon for a buyer to pay well above asking price. With the demand from Buyers remaining strong in 2018 and not very many new home builders providing entry level housing, now is the time for Sellers to get off the fence and contact a PressPlay agent about the possibility of listing their home and getting them into a new home while interest rates remain affordable.
Inventory: Where are the Houses?
There is one more factor driving the resurgence of the real estate market – there are very few homes available for purchase. Despite the Buyer demand being up by 25% in some areas, the houses to buy are just not there, with an 11% decline in listing inventory.
So why are homeowners not putting their homes up for sale? Well there are multiple reasons including people are more frugal, some were able to buy more house to grow into during the CRASH, while others are just now moving into an equity position with their home but can either update the home or sell it for less than they want.
In 2018, expect to see two retail markets emerge in what we refer to as the “Love it or List it” syndrome. Sellers who have managed to just hold on through the recovery and now have some equity in their home can either pull that equity and update their now outdated home to stay in for a few more years, or they can sell it for less than the updated home around the corner. With more homes coming available that need some new carpet, paint, etc. watch for local “Fixer-Uppes” to become the next trend in housing as more people decide to put everything they’ve learned from watching HGTV’s Chip and Joanna Gains to use and begin building their own Magnolia Farms.
Excellence in 2018
All these factors lead us to feel and believe that 2018 will be a great year for real estate. Low interest rates, good home values, healthy appreciation of 4-6%, high buyer demand and many more local reasons means for the first time in 15yrs we have a market that is exciting for buyers, seller and investors.
If you have thought about entering the real estate market in the past, NOW is the time to contact your PressPlay Realty Network agent and talk. No need to decide something. Just talk, consult and get some advice on what the best path is to purchase, sell or invest in 2018.