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3 Reasons to Sell Your House Today! (Part II)

This week, we are going to look at the three reasons to sell your house now instead of waiting: demand is strong, supply is low and new construction will soon be your competition. – The KCM Crew

Part II – Housing Supply is Low

Homes for SaleA seller’s ability to sell their home in today’s real estate market will be determined by both the supply of homes for sale and the demand for that housing. In real estate, supply is represented by the current month’s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month).

While there is no steadfast rule that will apply to pricing in every category of housing, here is a great guideline:

  • 1-4 months’ supply creates a sellers’ market where there are not enough homes to satisfy buyer demand. Appreciation is guaranteed.
  • 5-6 months’ supply creates a balanced market. Historically home values appreciate at a rate a little greater than inflation.
  • 7-8 months’ supply creates a buyers’ market where the number of homes for sale exceeds the demand. Depreciation follows.

What is happening across the country right now?

In most parts of the country, supply is dropping like a rock. According to the National Association of Realtors, total housing inventory is below a five months’ supply. This is almost 20% below inventory numbers of just a year ago and at levels we haven’t seen since 2005.

Based on the table above, we can see that the supply/demand ratio is showing a sellers’ market where prices appreciate. This has created positive movement in housing values in most parts of the country.

Sellers have a great opportunity right now. Historically, inventory increases dramatically as we approach summer. Selling now while demand is high and supply is low may garner you your best price.

Tomorrow, we will look at the competition new construction will create.


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2 replies
  1. Amy Tierce, Fairway Mortgage
    Amy Tierce, Fairway Mortgage says:

    In the northeast, I watch this real estate market catch fire with bidding wars
    on many properties, multiple offers going well over asking price (some 100’s of
    thousands of dollars over), sellers demanding that offers be contingency free,
    that inspections be done prior to making an offer, and I feel afraid…

    Pushing this market could break it, it is fragile. Listing agents beware; sellers beware; buyers beware; lenders beware! These are exciting times, but if we are not respectful of buyers, of the lending system, of the timing required to complete a transaction the right way, we could all end up getting burned. For more on this visit http://www.amy@amyrates.com and thank you KCM for this series on why now is a good time to sell!

    Reply

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