The U.S. Housing Market
The U.S. housing market was unseasonably strong during the four-week period ending July 12. Listing prices were up 13% year over year to an all-time high of $328,500.
While closed sale prices, lagged behind listing prices, they were also up 6%. Home prices are turning in monthly gains at a time of year when prices normally start heading down because people shift their focus from buying and selling homes to vacations and preparing for the start of school.
Almost half (45%) of people who bought a home in the past year made an offer on a property that they hadn’t seen in person, the highest share since at least 2015, according to a Redfin-commissioned survey in May and June of more than 1,400 people across 29 major markets. That’s up from 28% during the same period last year.
Many Americans who were already considering relocating before the coronavirus pandemic are now taking the plunge, as mortgage rates continue to fall and employers implement flexible remote-work policies. A record 27% of house hunters looked to move to a different metro area in the second quarter of 2020, up from 25% in the second quarter of 2019.
BUYERS ARE FACING FIERCE COMPETITION AND PULLING OUT ALL THE STOPS
With so much competition for so few homes, homebuyers are employing dramatic measures to make their offers stand out because there really are some bidding wars happening! One of the most effective strategies I can recommend is to offer free rent back to the sellers, sometimes for months past the date that the sale closes. A rent-back agreement allows the seller to stay in the house for a period of time after the sale to the new buyer closes, typically to give the seller extra time to find a new home. In a recent survey of about 400 Redfin agents, about one in 10 mentioned that their clients had used this tactic to win a home.
Some homebuyers are employing other strategies to win bidding wars, such as waiving their contingencies, offering to do the inspection right away, putting more money down as earnest money, paying over the asking price, sometimes in cash (if they are able to), and some are even writing personal heartfelt letters to the seller to let them know how much the home would mean to them! So many different tactics are being used to getting just that slight edge over others.
SO IS IT THE RIGHT TIME TO SELL?
What a strange summer it’s been in the real estate market! Between the continued threat of the novel coronavirus, a wobbly economy, and layoffs happening left and right, it’s no surprise that many who may have hoped to sell their home this season are wondering whether to put those plans on hold—or they’ve already thrown in the towel.
Such hesitancy is understandable. Yet the irony is that, after closely examining the current housing market conditions, many real estate experts believe this summer could be one of the best times to sell a home in years.
Here are some reasons you should consider putting your home on the market in August:
- Buyers still outnumber sellers in the housing market, which means it’s better to be a seller than a buyer.
- Home inventory remains low
- Home prices are up
- Mortgage interest rates are low
- The economy is showing slow signs of recovery
- Homebuyers’ needs have changed
Just be prepared for the unexpected. Things sure have changed this year!
The time it takes to sell a home does seem to be shrinking, as states lift restrictions on business and consumers feel more confident and comfortable, but depending on how infection rates evolve, this could change. Let’s talk and see how the horizon looks for your home so you can make an educated and sound decision.