Why Sell During Fall?
It’s commonly held among real estate professionals that springtime is the prime home-selling season, but for a variety of reasons such a timeline may not be possible for every seller. This is why you should be aware of the ins and outs of other selling seasons in case the need to sell your home quickly should arise. The fall real estate market is almost always a hot season, and autumn or fall is the second best time of the year to sell a home. This is in large part due to the fact that families have returned from summer vacations, kids have gone back to school, and the holidays aren’t yet upon us (at least not yet in an annoying way). When fall hits, we’re collectively set to enjoy 75 to 80 days of relative normalcy and stability, and that’s a great time to sell a home.
Barring any unique market trends, there are some things that are always true about selling a home in the fall. For one, since it’s a less desirable selling season, you as a seller are going to face less competition but not necessarily a shortage of buyers. Real estate agents are also more likely to hustle a bit harder for a lower commission, given the perception of fall as an off-season. As the end of the year approaches, the time necessary to close ends up being a little shorter, as all players on both sides of the deal are anxious to get financial dealings sewn up and finished before filing taxes. You’re also more likely to find committed, serious buyers around this time of year; a buyer might, for example, need to buy a home due to a life change such as a job transfer rather than an idle notion that they want a new house.
As 2016 draws to a close, though, there are some trends unique to this year, which make fall a good time to sell. The latest Realtors’ Confidence Index from the National Association of Realtors shows that buyer demand remains very strong throughout the vast majority of the country. This means that buyers aren’t going to be in short supply as might ordinarily be expected during off seasons. There’s a lot of buyer activity currently in the market, and it can be taken advantage of within the context of a few other realities of 2016. By the same token, according to NAR’s latest Existing Home Sales Report, the supply of homes for sale is still under the 6-month supply that is needed for a normal housing market. In other words, the supply of homes for sale is low while demand is high, and that’s the very definition of a sellers’ market.
This is good news for home prices, but additional inventory is about to hit the market. Because most homeowners experienced a negative equity situation in their homes over the past few years, they haven’t been willing to sell. This has translated to several years’ worth of a backup of homeowners who want to sell but haven’t been able to. Now that homeowners are now seeing a return to positive equity as real estate values have increased over the last two years, this dam is about to burst and many of these homes will be coming to the market next year.
This buildup isn’t limited to just homeowners, either. As builders regain confidence in the market, new construction of single-family homes is projected to continue to increase and will reach historic levels in 2017. Last month’s new home sales numbers show that many buyers who have not been able to find their dream home within the existing inventory have turned to new construction to fulfill their needs, and the industry is more than happy to oblige them thanks to increased confidence. The choices buyers have will continue to increase. Don’t wait until all this other inventory of homes comes to market before you sell.
In addition to fall being a little easier on decreasing closing times, this year in particular carries another advantage when it comes to saving time (and money!). As the market heats up with new homes and newly empowered sellers eager to sell, combined with the large supply of buyers, banks will be overloaded with loan inquiries causing closing-time lines to lengthen considerably. You can avoid most of this by selling now and it will make the process quicker and simpler.
If as a homeowner you’re selling with the intent of moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by 5.3% over the next year. If you’re moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. According to Freddie Mac’s latest report, you can also lock-in your 30-year housing expense with an interest rate around 3.46% right now. Interest rates are projected to increase moderately over the next 12 months, and even a small increase in rate will have a big impact on your housing cost.
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