Will 2017 Be a Good Year to Sell?
If you’re thinking about listing your home for sale this year, it’s a good time to weigh the pros and cons as economic conditions shape up. Here’s an overview of conditions across the country and some advice on how you can find out the latest accurate information on trends where you live.
Inventories of homes for sale are at multi-year lows
Usually inventories of homes for sale are higher during the spring months than later in the year. Buyers are more plentiful when the spring sales season begins, so sellers are wise to list their homes by March or April. However, the outlook for this year is grim.
As the year ended, the supplies of homes for sale were at multi-year lows. The total housing inventory at the end of December was at the lowest level since National Association of Realtors began tracking the supply of all housing types in 1999. The situation is even more serious for lower cost homes. In December, supplies of starter homes popular with were 12.2 percent below last year, compared to 5.6 percent for premium homes.
During the winter months, sellers will replenish inventories as they list their homes but because 2016 ended with such tight supplies, springtime inventories in most markets are expected to be lower than they were last year.
Despite strong demand, lack of supply will slow sales
Despite gradual increases in mortgage rates since last July, rates currently are about the same as they were last spring. Rates are not expected to be much of a deterrent and rising income and employment levels will continue to make it possible for first-time buyers to become homeowners. Thus, consumers are slightly more confident that this is a good time to buy a home. However, despite health demand, lack of supply is expected to put a damper on sales. Economists at Fannie Mae forecast first quarter sales to be only about 2 percent higher than they were last year.
Prices will continue to increase
Home prices in December were about 4 percent higher in December than they were a year ago according to NAR and 2016 as a whole should see price appreciation around 5.7 percent – a very healthy rate for real estate. Prices are expected to rise at a slightly slower rate (5.4 percent) but still above historic levels.
Regional trends favor the Midwest and Northeast
For several years, Western markets like Denver, San Francisco, and Seattle have led the housing recovery. Last year they slowed as prices outpaced incomes and homes became less affordable. Now Midwestern markets like Milwaukee (7.1 percent forecasted growth) and Southern markets like Dallas-Fort Worth (11 percent forecasted growth) and Nashville (7.1 percent forecasted growth) are expected to lead the nation.
Though these national and regional trends will probably affect your market, real estate is a highly local business and local markets can vary widely. Here are some tips for homeowners thinking about selling to get a good idea of current trends in their markets.
Use Homes.com’s valuation tool to check current values
Begin your research with the latest economic and pricing information in your market. Enter your address and you will be taken to an overhead Google map view where you can see values for recent sales (purple), homes listed for sale (blue) and homes not for sale (green). Check recent sales within three miles of your home to get an idea of sale prices of homes that are comparable to yours by age and size.
Access local data
Many multiple listing services and brokerages report monthly sales data on their sites. Four or five larger state Realtor associations report monthly state data and the National Association of Realtors reports regional data each month in its Existing Home Sales news release. You can see a regional breakdown of that report. NAR also publishes a monthly Realtor Confidence Index report that provides good trend data on a range of import issues for sellers like days on market, cash sales and issues that delay or cancel closings.
Your best resource for local market trends is your local real estate agent. He or she will have access to the latest local data as well as an expert view of trends in your local market. Ask your real estate agent for a competitive market analysis of your home for the latest information to help you price and market you home successfully.