Friends and Clients —
The real estate market is in an unusual position right now. Let me explain.
First off, mortgages are once again incredibly low.
After increasing for much of last year, mortgages started dropping last November. And they've kept dropping, up to and including the present. The current 30-year fixed-mortgage rate stands at 3.49%, just 0.18% over the all-time historic low.
Second, home prices are rising again. This July, home prices rose 3.6% over the previous year.
However, we are also seeing fewer bidding wars. Just 10% of listed homes wound up in a bidding war this August, compared with 42% last year.
Finally, existing home sales are barely holding steady. Home sales dropped in every month for the past year and a half, but were slightly higher this July.
So you can see why it's an unusual position right now. Mortgage rates are incredibly low, making homes more affordable. And yet homes sales aren't taking off. Prices are increasing, but this isn't being driven by heated bidding wars.
So what's going on?
Well, it’s partially due to overall economic uncertainty. The stock market recently experienced several big swings, and this has pushed mortgage rates down while keeping some buyers on the sidelines.
But a much more important cause is likely to be the severe shortage of homes on the market.
Last autumn, we finally saw an increase in the supply of homes for sale. However, with the ongoing drop in interest rates, more demand soon overwhelmed the increase in supply.
Housing inventory was near all-time record lows in early summer, and this explains the low number of home sales.
So what does this all mean for you?
Well, if you've been considering selling your home, then I think right now is the moment to act, for two simple reasons.
First, the current low mortgage rates are making homes very affordable to buyers. But this could change at any time. The mortgage rate could start swinging upwards, just like it did last year.
Second, home prices are at very healthy levels right now. That's largely due to the lack of inventory. But if mortgage rates start increasing, this too could change quickly.
The upshot is that if you list your home now, chances are good that you can sell it quickly and for a top price. Wait a few months, and the situation might change dramatically.
In case you'd like to see what your home is currently worth, take a look at this home value calculator, which takes into account recent Cleveland sales:
Enter your home address here to find out what your home is currently worth
And if you are thinking about selling, give me a call at 423-896-6000. I've been talking to a lot of buyers around Cleveland, and I can give you my advice on how to best position and price your home in the current unusual market.
Have a great day,