Okay, time to get off the fence and make a decision. Are you going to sell your house, or not? There have been many reasons homeowners have shied away from the subject in recent years, but things are changing and it’s time to look at whats going on, weigh your options and make a decision.
Any way you look at mortgage rates, they’re still hovering at a near 30 year low. They have, however, been rising since late october to just over 4%.
“We expect them to hold at this (4%) level for a while and continue to adjust up,” says Danielle Hale, managing director of housing research for the National Association of Realtors®. “Mortgage rates rarely move in a straight line. They could be in the 4.6% to 4.8% range by the end of the year.”
As long as mortgage rates stay below 5%, we’re looking at a sellers market. Why? Lower mortgage rates mean lower monthly payments, meaning more people are going to be looking at a wider variety of homes. Buyers in the know will also be trying their hardest to close a deal before any rate hikes occur. These are all things that benefit the seller tremendously. More people will be buying homes, and in turn, taming the inventory or obliterating it altogether.
Supply and Demand
Obliterating inventory is a good thing for sellers, by the way. Just like you learned in 5th grade economics, when there is less of something it's worth infinitely more- especially in residential real estate. Here in Hawaii, strict building laws and lack of new land to develop means there are a limited amount of homes to be sold anyways- not to mention the fact that when a good deal does come about, investors looking to capitalize on the vacation rental market will often swoop up deals with cash.
Not only is inventory on the Big Island slim, in certain areas its moving at an alarming rate. If priced correctly your home or condo could move within days. It’s not uncommon to see houses go contingent under 20 days on the market.
Prices are going up
Thank the rule of supply and demand for this one, sellers. Low rates + Low inventory = High Prices! This is great news for owners who had their home values decimated during the recession. Even owners who were once underwater, owing more than what their property was worth, now have a chance to sell without eating a huge loss.
“2017 will be a rare ‘balanced market’ for buyers, because even though mortgage rates are edging up, many sellers have recovered enough equity to be able to afford to sell,” says Colby Sambrotto, president and CEO of USRealty.com.
Prices will continue to raise as long as there is someone there willing to buy at that price- and while rates are low enough there will be a substantial amount of people willing to invest... meaning prices will just keep climbing until buyers aren't comfortable with interest rates.
Unemployment is decreasing. Guess what? That is an excellent thing for sellers! More people with steady jobs create more people with the funds, confidence and overall ability to buy a home. The more confident consumers are, the more likely they are to make big ticket purchases; properties, cars and boats.
So watch the job market, because, depending on the price range of your home, it may make a giant impact on the time frame in which you get your house under contract. Consequently, Hawaii has one of the lowest unemployment rates in the country, meaning there are more potential real estate buyers and investors here per capita than any other state. More people have jobs, more people have money.
In any case
Choosing to sell your home is a big decision, and there are many crucial factors to consider before taking that first step forward. Following the market, researching surrounding sales trends and understanding the overall global market flow are just the basics- The Big Island of Hawaii is its own living, breathing real estate anomaly. Attempting to navigate such terrain without a professional could have adverse, injurious effects on your chances of getting the right price. Make sure to call or contact me, James T. Morrison R(S) with Koa Realty, inc. We can work together and come up with a listing solution and strategy.