Traditionally, home sellers list their homes in the Spring/Summer to take advantage of the height of the buying season. However, 2017 is already proving to be a year of change and economists are urging home sellers to list early if they want to sell under the most favorable conditions. Here’s why:
1. Nationwide, inventory has dropped considerably. Throughout 2016, we were facing low inventories that fueled quick sales and multiple offer situations. In New Hanover County, mid-July saw between 1,800 and 1,900 single-family homes on the market. In November, that was down to 1,600 to 1,700 single-family homes. Now, we’re at 1,400 to 1,500 single-family homes. As a result, competition among properties is decreasing.
2. Rising interest rates are building an urgency among buyers, who don’t want to miss out on locking in a great rate. Demand is higher than normal for this time of year, and we’re seeing it in the increase in requests for pocket listings. In our brokerage alone, there have been more buyer’s agents putting out feelers for upcoming listings than mid-2016 during the height of the busy season. They have buyers, but no listings that fit all their needs, so they’re looking for anyone who has been sitting on the fence about selling. This doesn’t mean that there are a bunch of desperate buyers floating around; however, it does mean that it’s a seller’s market.
3. Interest rates are forecast to rise later in 2017, and many sellers need to sell before buying another home. It will prove advantageous for them to sell early, so they too can get a lower interest rate when they purchase. While the increase won’t be dramatic, even avoiding a .5% hike can save a buyer thousands of dollars over the course of a loan.
Before a buyer makes a final decision about listing their home, we always recommend they get a Comparative Market Analysis (CMA). This will tell them how homes similar to theirs are selling and will give them a good idea of what they could get if their home sold. While it may be a seller’s market, it does not guarantee that a home will sell for whatever amount they need. It’s important to enter the market educated and with reasonable expectations. Trying to sell a home for more than its fair market value will only result in it sitting on the market, because a buyer purchasing with financing has to prove to the bank via a third-party appraisal that the property is worth what it’s selling for. If the bank doesn’t agree that it is, they’ll refuse to finance the purchase.
If you’re thinking of selling in the Wilmington area, we’d be happy to create a CMA for you and discuss your options for selling. Give us a call at (910) 202-2546 or send us a message through our Contact page.