Summer is here, which means it’s the high season for real estate. If you’ve been thinking of selling your home, you might be in for a golden moment.
However, it might not last long. Let me explain why, with a few details about the current real estate market.
Right now, homes are selling in record time. This May, it took just 34 days on average for a home to go under contract, which broke last year’s record of 36 days.
Home prices also continue to rise. In fact, they’ve been rising for six straight years. For the past two years, this growth has been accelerating. As a consequence, 27.6% of the homes sold in May sold above their list price.
All of this is due to a woefully short supply of homes on the market. In fact, the total supply of homes is 5.4% lower this year than it was at the same time last year.
However, the real estate market might be on the cusp of change. Mortgage rates have been rising, and now stand near their highest levels in seven years. As a result, pending home sales were down as of April. More alarmingly, we saw a drop in customers touring homes for the first time in 27 months.
What’s going on? The home price surge might be nearing its end. Overall, home affordability is dropping: Over the past 6 years, there has been a 48% increase in average home prices, while wages increased only 14%. Wage growth has not kept pace with home affordability and we saw the results of that in April.
While some sellers are still managing to sell at higher prices than listed, nearly a quarter of sellers actually had to lower their prices this April. What does this mean for you?
If you do decide to sell right now, you would have an easy time of it, and you could get top dollar for your home. If you decide to wait, things might go south quickly. That’s because the market may be reaching the limits of price growth and may be stalled by higher mortgage rates.
If you want to take advantage of current conditions by buying or selling a home any time in the near future, don’t hesitate to reach out and give me a call or send me an email today. I’d be happy to help you figure out what we think your home could sell for with a CMA. I look forward to hearing from you soon.