Looking to sell? Do it now
Many experts continue to evaluate the upcoming economic climate to shape the real estate market in 2017. The extreme fragmentation in the housing market and the wide range of variance based on location makes this a very interesting position for buyers as well as sellers.
Previously, the moving trend seemed to point toward 30 year fixed rate mortgages staying in the 4 percent range in 2017. But, current trends are telling a tale of rates moving closer to 5 percent by year’s end. Mark Fleming, chief economist at First American has been evaluating the current climate and sees “mortgage rates getting much closer to 5 percent at the end of the year. Because of that, we estimate that that will reduce the amount of expected home sales by about 200,000 over the course of the entire year, which is roughly a 4 percent decline on our original expectation,” he added.
Some home sellers may choose to stay put and renovate their current home instead of buying a new home at a higher mortgage rate. “We now have an entire generation of existing homeowners locked into mortgage rates around 3.5 percent to 4 percent,” continued Fleming. “How do we address the fact that the existing homeowner, the largest single source
of financial supply, has a built-in financial disincentive to make that supply move?”
Moving from downtown to the suburbs
Good news if you are looking to sell a downtown condo and move to the suburbs. Your equity should hold up well
as small homes have seen a much steeper price growth than larger homes and urban areas have appreciated well.
But, if you are in the suburbs looking to downsize to a smaller, urban home, inventory has become more scarce and you might not get as much as you expect for your money.
Upgrading to a larger home?
Of all the scenarios, you are most likely in the best
spot. The first part of 2017, early in the buying season, is likely your best time to strike. Inventory in the higher end of the market is actually climbing in quantity, which makes for better buying situations and time to compare and house hunt.
If you are selling a larger home and fielding various offers, it can be a good decision to choose a higher offer over a faster closing date, enabling you to get the most money out of your sale. Of course, this is dependant on your
specific situation and you should use the council and wisdom of your realtor to guide you in this area.
First time buyer or downsizing
Starter homes or smaller properties fit for those looking to downsize will continue to be in hot pursuit of the majority of buyers. You will face a tight market with greater competition from other would-be buyers. Be ready to be flexible on your location, size and amount of
tender loving care a property might present. While most first time buyers and downsizers aren’t looking for a major renovation project, keeping your options open to properties in need of cosmetic upgrades might bode well for your ability to score a deal in your price range. If you are willing to move further from the city, you might have even better opportunities for inventory. Maureen Hughes is the Lead Listing Specialist of The Wayne Megill Real
Estate Team of Keller Williams Brandywine Valley in West Chester. For buyer or seller representation, or for more perspective on the local and national real estate market, please email maureenhughes@ kw.com and visit The Wayne Megill Team site at http://www. waynemegillteam.com.
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