The real estate and housing market may not be as vibrant as it was a few years back, but selling your home before the end of the year may just be your best bet.
Not many people see 2019 as being a record-breaking year in terms of home prices.
But, if you take a step back and think, 2019 may just be the perfect year to sell your home. This is especially so if you are considering selling your home either in the coming months or year. House Buyers of America CEO Nick Ron suggests choosing the devil you know over the devil you have no clue about.
“I think it’s better to sell now than to sell in 2020 or 2021 – who knows what is going to happen in the coming months and years,” Ron notes.
Home prices have stagnated since the end of 2018. This phenomenon can be attributed to fewer people having enough money to invest in the real estate market thanks to the Federal Reserve which has continuously increased interest rates. In 2019, homeowners should not expect buyers to suddenly flood the market. However, this does not mean trouble for those who wish to sell their homes sooner rather than later.
If you purchased your home within the last two years and are still comfortable and satisfied with living in it, you can go ahead and wait another 5 years before thinking about selling. However, if you are really determined to sell your home in the near future, your safest bet is to sell as soon as possible as opposed to watching and waiting.
4 Reasons To Sell Your Home In 2019
1. New Buyers are Coming Into The Housing Market
As interest rates go up, some buyers are more reluctant to apply for mortgage or make an offer on a house, so be prepared to see low buyer interest. And, if your home falls in the category of high-end properties, you should expect even lower buyer interest. Ron says that the mix of very high price tags on houses and rising mortgage interest rates has led to the decline in the number of home sales reported in recent months.
However, even with high mortgage interest rates and high price tags on homes, people who want to buy homes will proceed to shop for homes. There is a new wave of home buyers who are mostly millenials who are buying their very first homes. A Harris Poll survey that had over 2,000 participants in the United States reported that more than a fifth of U.S citizens aged between 18 and 34 said that they were planning to buy a house within the next year. A 2018 report by the National Association of Realtors notes that millennials make up over 35% of home buyers in the country.
What’s the bottom line? Well, while homes may not go as quickly as they did a few years back, there are still many people out there looking to buy homes. It’s therefore possible to make money from the new and active buyers in the market right now.
2. Interest Rates Are Still On The Lower Side
Mortgage rates have risen slightly in the last couple of months. The interest rates we have today are some of the highest we’ve seen in the country over the course of the last 7 years as reported by Freddie Mac. A couple of months back, interest rates hit a notable high of 4.94%, but they are now back down to 3.625%. So, what does this all mean? Well, it’s expected that interest rates will continue to rise in the coming months, but they’ll still remain significantly lower than the all time high rates experienced in years such as 1981 where rates reached a peak of 18%.
It’s crucial to remember that interest rates reflect the Fed’s opinion on the current state of the market and economy. However, mortgage rates are calculated based on what type of property you are buying and your current financial status.
So, just because the Fed raised interest rates after holding some meetings doesn’t mean that buyers will have to pay more to own homes. The chief commercial and consumer banking officer and executive vice president at TIAA Bank John Pataky puts it like this, “Not every interest rate rise imposed by the Fed will have an effect on your mortgage rate.”.
A dramatic increase in mortgage rates is highly unlikely in 2019. Pataky goes on to say, “We do anticipate mortgage interest rates to continue rising steadily in the coming months.”.
So, if you are looking to benefit from the lowest mortgage rates in the course of the coming months and years, this is the time to do it.
3. You Have High Equity
People who bought homes during the recession or immediately after benefitted from some of the lowest mortgage rates in history. Up until 2015, home prices were really low as people struggled to get back on their feet. If you are one of those people who invested during the above period, your home equity has increased considerably. All the renovations and repairs you have done to your home combined with the rising prices of other homes on your block have contributed to your high home equity.
The higher your home equity, the more you can get in net income from the sale of your home. You can even put in a larger deposit on your next home which will guarantee you better treatment from lenders who prefer buyers who put up large deposits on properties, find a Plantation real estate agent. And, you will also benefit from lower interest rates.
4. Selling In 2019 Vs. 2020
It’s possible that if you don’t sell your home this year, you’ll be forced to sell next year. Selling now is definitely the better option as highlighted in a recent survey conducted by Zillow which covered more than 100 economists and real estate experts. Over half of those surveyed said that they expected a recession in 2020. Also, a good number believed that the recession will continue into 2021.
So, whether you see a recession in the horizon or not, the current market suggests that buying trends are not about to drastically change for the better in the near future. Typically, the housing market has a cycle of 10 to 15 years where it shifts from being a buyer’s market to a seller’s market.
Bottom line: It doesn’t seem like there is going to be any drastic change in home demand any time soon. So why not sell now when the demand is still there.