For homeowners, the last 5 or 6 years has been a pretty chaotic time. First came the peak of the housing bubble, followed by its inevitable crash. Millions of homeowners found themselves under the threat of foreclosure while others, who might otherwise have sold their homes during a healthier market, found themselves with few options until the market recovered. Given the chaos of the past few years, it is understandable that homeowners might have checked out and stopped taking their options into consideration. And, while there’s been no shortage of stories about the real estate market, none of them seem to tell the whole story. But take those stories and put them together and a much more clear picture emerges. The truth is,for the first time in years, now is a good time to sell your home.Here are the reasons why. Prices are increasing No story has been talked about more in the past year than this one: Prices are increasing at a rapid rate. The reason is simple: A lot of people want to buy, but there are not enough homes on the market to sell to them. That creates a simple supply and demand issue. If there are more buyers than inventory available, prices go up. One of the main reasons housing inventory is so low is that during the past 5 years we stopped building homes at the rate needed to keep up with the number of new households that are being formed. This is understandable when you consider the fact that the past 5 years have consisted of incredible numbers of distressed homeowners who either lost their home to foreclosure or did a short sale (sold the home for less than what they owed on their mortgage). We didn’t need to build new homes because there were plenty on the market. Now that the market is turning for the better, however, the fact that we haven’t been building homes is catching up for one simple reason: Homes take a long time to build. Even though the economy is improving and homebuilders are building new homes again, it will still take some time for those homes to hit the market. It is unlikely that prices will continue the accelerated pace that they’ve seen in the last year, but there is clearly a lot of room for growth. For homeowners, these price increases means that your home is increasing in value again. Combine that with fewer homes on the market, and that means that sellers are in an incredibly advantageous position. Are interest rates going to drive buyers away? Another big story in the last year has been interest rates. Before the crash of the housing market, it wouldn’t have been unheard of for a buyer to be very happy to get an interest rate of 7-8%. Well, in 2012, interest rates hit incredible lows. Interest rates are inching back up as the market recovers. Some of the more recent news might lead you to believe that increasing interest rates will scare off potential buyers. This, however, is not the whole story. First, interest rates are still very low when you look at the big picture. Even as recently as 2010, interest rates were over 5 percent. The fact is, these interest rates are allowing more potential buyers into the market than at any point in over 40 years. And, as we already mentioned , there are more buyers than there are homes to sell to them. Secondly, if you look at interest rates through the 90’s, which were some of the most prosperous times in real estate, you see that in some years they were still double today’s rates. People will always need someplace to live, and today they are extremely hungry to buy. For homeowners who have been waiting to sell, this is just more evidence that they have the advantage. Are we in a new housing bubble? With prices increasing at incredible rates, interest rates down, and buyers trying desperately to buy homes, one of the most popular stories lately has been to ask if we are in another bubble that will burst leaving homeowners holding the bag again. In fact, there is nothing the media likes more than to try and predict the next economic crisis so that they can say “we said it first!” The facts show that the real estate market is now recovering from an historic crash where there was nowhere to go but up. And, while it is unlikely that these trends will continue in such a dramatic fashion as in the past year, these are all positive signs for homeowners who can now be in control of their own future. Take control! If you have been waiting to sell your home, especially if you or someone you know is having difficulty with their mortgage, it is time for you to start exploring your options because your home may be worth significantly more than you realize. The important thing is to know where you stand. Do you know what your home is worth today? What are homes in the area selling for? These are all questions to which the answers have changed significantly in the last few months, and knowing your specific situation will help you make more informed choices. As a real estate agent in today’s market, I make it my business to have the most up-to-date information and can help you understand exactly what your current situation is. If you have been underwater, it is entirely possible you are not anymore. If you have been holding off until the market started to recover, that time is now. Contact me today for a free market analysis and let me help you determine your best options. Arm yourself with information and make a more informed choice. It might just end up being an incredibly profitable decision- Call 714-281-1146. #
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