Times are hard for the country and the country’s economy during the pandemic. Even among the pandemic, the housing market has flourished. Now is a great time for sellers to put their homes on the market.
“Given the pandemic and uncertainty it’s caused, the general sentiment [among some owners] is that now is not a good time to sell your home,” says Danielle Hale, chief economist at realtor.com®. “Yet so far, the data suggest the opposite—that buyers outnumber sellers in the housing market, which means it’s better to be a seller than a buyer.”
If your thinking of selling, here are several reasons why right now is the time to sell.
Homebuyer demand is back with a vengeance. There was a slowdown when COVID-19 first shut down open houses but now the lockdown restrictions are slowly lifting, homebuyers are rushing to the open houses.
According to the National Association of Realtors Pending Home Sales Index, the residential real estate market is strongly rebounding. May brought a spike in pending homes sales which shot up to 44.3% making it the highest month-over-month jump since 2001.
Matthew Gardner, the chief economist at Windermere Real Estate, explains there is a huge demand right now. He sees very strong demand in the suburbs and the smaller cheaper cities. Buyers want to get away from the biggest metros since many Americans are working remotely from home.
“If we continue to see an increase in working from home, people can move farther away, where they can get more bang for their buck,” Gardner says.
Home inventory remains low. Home inventory is at an all-time low and does not meet the pent-up demand. In fact, the inventory reported by realtor.com’s market outlook for June was 27% lower than June 2019.
“There was insufficient supply last year,” says Lawrence Yun, chief economist of the NAR. “This year during the pandemic, the shortage has intensified.”
The National Association of Realtors found that the low is due to people living in their homes longer nowadays. Americans are living in their homes on an average of 13 years. It is also due to the fewer properties going into foreclosure due to the massive government stimulus that includes mortgage forbearance and generous unemployment benefits.
Home prices are up. “Many sellers can get top dollar in the current market conditions,” says Yun.
Homebuyers are up in demand for new homes while inventory is low. This is a perfect seller’s market. The National Association of Realtors found “that single-family home prices increased in most markets during the first quarter of 2020, with the national median single-family home price increasing 7.7%, to $274,600.”
“Home asking price growth is actually higher now than it was before the pandemic,” Hale explains.
Mortgage interest rates are low too. Historically low-interest rates are making the home buying process very attractive. Freddie Mac’s July 2 report confirms this showing the new record low of 3.07% for a 30-year fixed-rate mortgage. Overtime a home purchased now could cost tens of thousands less over a lifetime of the loan then this time last year.
The economy is showing slow signs of recovery. The pandemic is still going strong and this might lead to a negative impact on the unemployment rates.
“The pandemic sharply curtailed economic production and consumer spending in March, April, and part of May. As a result, joblessness soared,” Hale explains. “But data from May and June suggest that businesses are adding back jobs as consumers get back to spending, and some companies are now scrambling to keep up demand. Some speculated that we’d see a sharp bounce back inactivity, and I think it’s fair to say that’s what we’re seeing so far.”
Homebuyers’ needs have changed. People are now working from home and spending most of their time at home. Those that live in town might trade their short commute for additional space.
“People are looking at their existing home and saying, ‘If I have to work from home, then maybe my house just doesn’t work,’” Gardner says.
Areas such as home offices, outdoor spaces and more rooms for privacy are becoming more important.
“Spending three months locked up at home taught a lot of people that where they live is important,” agrees Jed Kliman, managing broker at Windermere Real Estate in Seattle. “Clients I’ve been working with recently are trading up because they’ve spent more time in their homes and realized it didn’t meet their needs.”
Right now is the perfect time to sell your home. Taking these six facts into consideration will definitely put you ahead in the game.
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