Should I list my house for sale now? This is a common question that we hear from clients these days. Needless to say, strong buyer demand combined with slim housing inventories means that sellers have more negotiating power than ever. As a matter of fact, the supply of homes for sale is at a record low of 1.9 months. For perspective, a 6-month supply is considered a healthy balance between sellers and buyers. The continued high demand has driven home prices up throughout the country. According to The National Association of Realtors®, the median home price was $303,900 for an existing home in January, which equates to a 14% jump from the year prior.
What is the best approach?
The classic question posed by potential sellers is – “If I sell my home, where do I go?” Needless to say, the extremely tight inventory of homes for sale will also impact sellers looking to move after their house has sold. The best recommendation here is to identify and preferably purchase your subsequent property prior to selling your existing home. While this may not be an option for many people, it is the best way to approach the current market.
For those sellers that are not able to purchase a property prior to selling their existing home, things become more challenging. In some cases, sellers may even negotiate a rent-back agreement with the buyer to allow for more time to find a subsequent property to purchase. However in most situations, you may want to identify a short-term rental prior to selling your home. Needless to say, you will need to work closely with your real estate agent to identify potential properties to purchase as soon as they hit the market.
With home prices rising quickly in the past year, many home owners are feeling more tempted to sell their homes. As a matter of fact, 30% of U.S. homes with a mortgage in the U.S. are now considered “equity-rich”. A home being equity rich means that the combined estimated amount of loans secured by the property is 50% or less of the estimated market value. While this is welcomed news for home owners, it is important that they do not wait too long to sell their homes. As an example, mortgage rates recently ticked up to break the 3% barrier. While this is still considered very low, buying power does diminish as these rates begin to rise. Add in other factors such as the pandemic’s effect on incomes & rising fuel prices since January, and we could start seeing more headwinds for the real estate market.
All in all, the South Florida real estate market is projected to remain strong for the foreseeable future. If you are considering listing your home for sale in Palm Beach, Broward, or Dade counties, we can help. Contact Live South Florida Realty, Inc. for a free, no-obligation consultation.