It’s been 10 whole years since the housing market crash that left millions of home owners homeless. In today’s market, it feels as if this almost did not happen, the market has sprung back to life fairly quickly. Markets have bounced back with authority and confidence is sky high: From New York to California and everywhere in between, homes are on the market for a minimal amount of time and selling at record high prices.
Stating the obvious – It’s a great time to be a home seller or in other words, it’s super tough being a home buyer in today’s market.
“We’ve seen two or three years of what could be considered unsustainable levels of price appreciation, as well as an inventory shortage that resulted in a record low number of homes for sale across the country,” says Javier Vivas, director of economic research for realtor.com®.
Sounds like the stuff of a home seller’s dream. Something to note, If you plan to sell in 2018 and obtain a high capital gain, your window of opportunity is likely diminishing at a fast rate. Here is why:
1. Rates are climbing at a high rate…
As rate steadily increase, as we all know, the interest rate is a definite factor when buying a home. This can be the last straw that broke the camels back.
At some point, there will be a huge push of high interest rates which will drastically decrease the amount of home buyers that are willing to take on such high rates.
In short – If you’re thinking about selling, the longer you wait to decided and pull the trigger, the higher susceptibility you will have a smaller pool of home buyers that are willing to take on a high interest rate.
2. Inventory is at an all time low
As of June 2018, within the entire county of Santa Clara, the number of active listings was down a whopping 10% from June of 2017! We’re not talking about a few homes here.
Because you’re already educated about the whole concept of supply and demand system, I won’t go in depth of how this works. Obviously the less supply that is available, the higher demand there is. Consequently, people are willing to pay a premium for the available products.
Sellers, that means this is your opportunity to be wooed. Buyers, their choices limited, are going to great lengths (and making some major concessions) to win the house, says Katie Griswold, a Realtor® with Pacific Sotheby’s in Southern California.
“We’re in a very favorable seller’s market,” she says. “We’re seeing bidding wars—which push up prices—and buyers are submitting offers with very pro-seller terms, like forgoing the repair request or waiving the appraisal contingency.”
This gives sellers the luxury of pricing their homes over appraised values.
3. Millennial’s are ready and equipped to commit
Millennial’s are often financially bogged down by student loans.
However, within Silicon Valley, they are also often backed by high paying careers. Given Silicon Valley’s saturation of world renowned juggernaut companies like Google, Facebook, Apple and Amazon, to name a few, most millennial’s are well equipped with high paying positions as to empower them to take on these high selling homes.
Experts predict that millennials will account for a large portion of the buyer pool within 2018: Millennials could account for 43% of home buyers taking out a mortgage in 2018 (a 3% year-over-year increase), according to realtor.com data.