Waiting To Sell House Will Cost You
With record low housing inventories, real estate experts are predicting an uptick in homeowners who plan to sell in 2022. In the past, around 40% of all homes sold each year come between April and July. With such a tight real estate market today, this trend is actually expected to be much different than it normally is. Because there are many different economic factors coming with the new year, such as higher rates, this year will be different. Here are a few reasons as to why waiting to sell your house will cost you money.
Buyers Are Motivated More Than Ever
According to ShowingTime Showing Index, which reports data on showings scheduled across the country, reveals some interesting statistics. This information from ShowingTime is used to gauge buyer sentiment and show how many buyers are looking at homes at any given time. From their latest index in November, buyers are still motivated and active with low supply. Comparing November to November year over year, showings are scheduled at much higher rates than pre-pandemic numbers. All the information gathered from over 6 million listings per month shows that there is still an influx of buyers. Buyers are out there in record numbers and that trend will not slow down until rates move higher or inventory is sorted out.
Freddie Mac addresses the buyer fiasco in one of their recent blogs. They are quoted saying,
“The buyers who are willing to house hunt in a winter market, when there are fewer options, are typically more serious. Plus, year-end bonuses and overtime payouts give people more purchasing power.”
And with motivated buyers being proved to still be out there, there is information on the number of homes put under contract to back this up. According to NAR (National Association of Realtors) monthly publication of Pending Home Sales Index, the contracts for existing single-family home sales, condos, and co-ops have all increased. The latest index says:
“…housing demand continues to be high. . . . Homes placed on the market for sale go from ‘listed status’ to ‘under contract’ in approximately 18 days.”
Waiting To Sell Your House Could Miss Out
If you are looking to sell to be a move up buyer, there has never been a better time to move-up. For those are looking to move up to a bigger, more expensive home, strongly consider to do it now. Prices look to move up about 5% in this year as well, so that could end up costing you thousands of dollars in price appreciation. This means that it will cost you more money in terms of down payments and mortgage payments. That is not to mention that rates are priced in to move up about .5% this year as well. So, waiting to sell your home now will cost you thousands of dollars 0ver a few months of waiting.
Waiting To Sell Your House Will Add To Competition
As everyone has been talking about, inventory for real estate has been at record low levels. This contributes to the strong seller’s market we have seen since the start of the pandemic. With such high demand for homes, it will be beneficial to sell now as opposed to when inventory picks up. Due to basic economic principles, higher demand than available supply leads to a phenomenon called scarcity. When assets are scarce, those who own them have the pricing power. However, once inventory picks up, sellers lose the power they originally had. While the seller’s market will continue, it will not be as strong as we have seen.
This competition comes from more sellers wanting to list their house, as well as new construction homes finishing up. With more and more sellers looking to sell their home as the new year starts, this will add to inventory. A recent study according to realtor.com shows that many sellers elected to wait a quarter to sell their house. Many sellers tend to do this to avoid the hassle of selling around the holidays. 65% of people who were surveyed said that they would prefer to wait until the new year to sell. This is based on people who are already deciding to sell their home in the next 12 months.
New Constructions Add To Competition
New construction homes will also be hitting the market at record levels. In 2020, close to 1 million new single-family housing units were authorized. Many of these homes were put on hold because of labor shortages and supply chain issues. However, many of these homes are planning to be completed in 2022 as the supply chain issues subside. With plenty of new builds coming to market in 2022, older homes will lose some appeal. A lot of buyers in today’s market would like to buy a newer home than a fixer upper.