If you're considering about selling your house soon or are selling your house right now, you should be aware that the housing market is unlike anything we've seen or experienced recently, if not ever.
Home sellers would have had to wait weeks or months to receive an offer, which might not have been as high as they'd planned. Before concluding the sale, buyers might have undercut sellers or pressed them for concessions or other repairs.
But the COVID-19 pandemic drastically altered many aspects of our existence, including real estate.
Americans began moving during the height of the pandemic, many of them liberated from the restrictions of a daily commute to the office. Due to this, properties in various parts of the country were quickly purchased, sometimes just days after being on the market. In order to improve their position, buyers caught up in bidding wars frequently offered more than the asking price and waived inspections and other requirements.
All in all, this was wonderful news for the house sellers who were currently on the market. However, the game has changed once more as the pandemic has subsided.
As a result, it's critical now more than ever to comprehend the situation of the property market and play your cards well to secure the best offer and terms for you.
What impact COVID-19 had on the housing market
"We've all been through a hopefully once-in-a-lifetime experience that dramatically changed the way we lived, worked, and went about our daily lives," asserts Danielle Hale, Chief Economist. "It's likely that these experiences will stick with us and shape the way we make decisions for years into the future, even as we move forward and resume living the way we used to."
One reason is that pandemic lockdowns caused many people to recognize that their current living arrangements are no longer suitable for them.
The desire to own a larger, more practical house is one of the primary driving forces for homebuyers, according to Jason Gelios, a real estate agent with Community Choice Realty in Southeastern Michigan.
This is especially true for those who began working remotely during the pandemic and are now ready to move up to a bigger home so they may work at home in greater comfort and privacy after cramming their desks into dining rooms, "cloffices," and other nooks.
According to Gelios, "this enables people who are permanently remote-working to be more productive in their home."
Many people are now looking for homes in locations they hadn't previously considered because remote workers may no longer need to commute to the workplace frequently or at all.
Buyers sought out regions like South Florida where they could enjoy the outdoors, additional space, and the financial advantages that come with living here, according to Chad Carroll with The Carroll Group at Compass, in South Florida. "With remote work flexibility becoming the new normal, buyers sought out areas like South Florida where they could enjoy the outdoors, extra space, and the tax benefits that come with living here," he adds.
Housing costs are high
The fact that housing prices are rising is excellent news for home sellers. In June, they reached a record high, with the typical list price circling about $449,000. Prices have since decreased to a November median of $417,000, but this is still significantly higher than prices were at that time.
Homeowner equity has reached record-high levels as a result of this.
"The increase in housing prices makes it a great time for a home seller to cash out on their homes now," says Beatrice de Jong, consumer trends specialist at online real estate transaction firm Opendoor.
With that said, there is a significant caveat if selling necessitates your own house purchase in this incredibly advantageous market for sellers. The same high prices and rising mortgage rates (more on those later) will be faced by sellers looking to sell their next house.
Increasing interest rates
Over the past year, mortgage rates have increased from 3% to 7%, more than doubling.
This implies that a lot more people are having trouble getting the loans they need to buy a house. Thus, demand has decreased. In fact, many homeowners may elect to stay in their current homes rather than sell and then have to purchase a new home at a higher rate if they secured a low-interest mortgage more than a year ago. However, there may still be other factors driving some homeowners to sell.
Still, it's a seller's market
Homes were selling at historic rates and at record-high prices as a result of the epidemic. Additionally, sellers continue to be in the lead even though rising interest rates have partially reduced demand.
A seller's market can be described in a variety of ways, according to Hale. But a few notable characteristics are the scarcity of available homes for sale, how quickly properties are selling, and growing property prices.
The majority of purchasers are shopping for a new house because it's the appropriate moment for them, not because of market conditions, even though mortgage rates are reducing consumer demand.
They are intending to start a family, get married, move in with a partner, or extend their family, according to Hale.
The same advice holds true when considering whether to sell your home: even if the market is in your favor, you should be sure that the moment is perfect for you to sell your home.
Consider your own particular situation, taking into account any recent or impending changes in your life, such as a change in employment, retirement, the arrival or departure of family members, and more.
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