Why Right Now Is a Once-in-a-Lifetime Opportunity for Sellers

Why Right Now Is a Once-in-a-Lifetime Opportunity for Sellers

If you’re thinking about selling your house in 2022, you truly have a once-in-a-lifetime opportunity at your fingertips. When selling anything, you always hope for strong demand for the item coupled with a limited supply. That maximizes your leverage when you’re negotiating the sale. Home sellers are in that exact situation right now. Here’s why.

Demand Is Very Strong

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), 6.18 million homes were sold in 2021. This was the largest number of home sales in 15 years. Lawrence Yun, Chief Economist for NAR, explains:

“Sales for the entire year finished strong, reaching the highest annual level since 2006. . . . With mortgage rates expected to rise in 2022, it’s likely that a portion of December buyers were intent on avoiding the inevitable rate increases.”

Demand isn’t expected to weaken this year, either. In addition, the Mortgage Finance Forecast, published last week by the Mortgage Bankers’ Association (MBA), calls for existing-home sales to reach 6.4 million homes this year.

Supply Is Very Limited

The same sales report from NAR also reveals the months’ supply of inventory just hit the lowest number of the century. It notes:

“Total housing inventory at the end of December amounted to 910,000 units, down 18% from November and down 14.2% from one year ago (1.06 million). Unsold inventory sits at a 1.8-month supply at the present sales pace, down from 2.1 months in November and from 1.9 months in December 2020.”

The reality is, inventory decreases every year in December. That’s just how the typical seasonal trend goes in real estate. However, the following graph emphasizes how this December was lower than any other December going all the way back to 1999.

Right Now, Sellers Have Maximum Leverage

As mentioned above, when there’s strong demand for an item and a limited supply of it available, the seller has maximum leverage in the negotiation. In the case of homeowners who are thinking about selling, there may never be a better time than right now. While demand is this high and inventory is this low, you’ll have leverage in all aspects of the sale of your house.

Today’s buyers know they need to be flexible negotiators that make very competitive offers, so here are a few areas that could tip in your favor when your house goes on the market:

  • Competitive sales price
  • Flexible closing date
  • Potential for a leaseback to allow you more time to find a home
  • Minimal offer contingencies

Bottom Line

Selling now may help you maximize the return on your investment before your house has to face more competition from other sellers.

2. Your Equity Is Growing in Record Amounts

Current homeowners are sitting on record amounts of equity thanks to today’s home price appreciation. According to the latest report from CoreLogicthe average homeowner gained $56,700 in equity over the past 12 months.

That much equity can open doors for you to make a move. If you’ve been holding off on selling because you’re worried about how rising prices will impact your own home search, rest assured your equity can help fuel your next move. It may be just what you need to cover a large portion – if not all – of the down payment on your next purchase.

3. While Rising, Mortgage Rates Are Still Historically Low

In January of last year, mortgage rates hit the lowest point ever recorded. Today, rates are starting to rise, but that doesn’t mean you’ve missed out on locking in a low rate. Current mortgage rates are still far below what they’ve been in recent decades:

  • In the 2000s, the average mortgage rate was 6.27%
  • In the 1990s, the average rate was 8.12%

Even with mortgage rates rising above 3%, they’re still worth taking advantage of. You just want to do so sooner rather than later. Experts are projecting rates will continue to rise throughout this year, and when they do, it’ll cost you more to purchase your next home.

4. Home Prices Are Going To Keep Rising with Time

According to industry leaders, home prices will also continue appreciating this year. While experts are forecasting more moderate home price growth than last year, it’s important to note prices will still be moving in an upward direction throughout 2022.

What does that mean for you? If you’re selling so you can move into a bigger home or downsize to the home of your dreams, you want to consider moving now before rates and prices rise further. If you’re ready, you have an opportunity to get ahead of the curve by purchasing your next home before rates and prices climb higher.

Bottom Line

If you’re considering selling to move up or downsize, this may be your moment, especially with today’s low mortgage rates and limited inventory. Let’s connect today to get set up for homebuying success this year.

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