What’s happening in the real estate market? That seems to be the question on everyone’s minds.
That’s because the real estate market is a key economic indicator. As the real estate market goes, so does the rest of the economy.
That’s why everyone is watching the market closely after The Federal Reserve raised interest rates and continues to debate more raises to fight off inflation.
Home prices have changed and it’s hard to tell where the market is heading. It’s even more difficult to know if now is the best time to sell your home.
Do you want to know exactly what’s happening with home prices? Keep reading to learn where the real estate market is going and get home selling tips to get the most value from your home.
A Brief Look at Home Prices Over the Last 10 Years
Home prices have gone up steadily since the 2008 housing crisis. Interest rates remained low and buyers were able to get good deals on homes for most of the last decade.
Some markets, such as Austin, TX, and Portland, OR were among the top markets, seeing large increases in home prices over this time.
Home buyers were looking for places with a high quality of life. These two cities are well-known for food, fun, and so much more.
Everything seemed to be rolling along smoothly until March 2020. That’s when COVID-19 happened and everything shut down.
The market came to a standstill. People were afraid to list their homes because they didn’t want COVID. Real estate agents adapted by offering virtual showings.
Real estate prices shot through the roof since then. Between the beginning of 2020 and the end of 2021, the median home price rose by 27%.
Home prices jumped so far in 2022. Home prices jumped another 20% in May compared to May 2021.
Why Did Home Prices Increase So Much?
Why did the market go up so high so quickly? It turns out that there are a number of issues at work.
The first thing is basic supply and demand. The U.S. housing industry has been lagging behind buyer demand for the last decade or so.
The construction industry hasn’t been able to build new homes quickly enough to meet the needs of first-time homebuyers and investors getting into the real estate market for the first time.
When COVID-19 struck, sellers weren’t listing their homes at all. Inventory was at record lows.
At the same time, The Federal Reserve lowered interest rates to record lows. That made it appealing for buyers because they can get a home loan and save thousands of dollars in interest.
Homebuyer demand was high while inventory was low. It wasn’t uncommon for a home to get dozens of offers within the first week.
Buyers got into bidding wars just to get an offer accepted. That drove home values up over the last couple of years.
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How to List a Home in This Real Estate Market
The first question you probably have is if this is a good time to sell your home or not. With interest rates climbing, the market should cool off, right?
Not so fast. Interest rates are still low compared to where they’ve been in the past. Buyers are still looking and the construction industry is still way behind demand.
The market will cool down, but home prices will only decline by 5% in 2023. You still get the majority of gains over the last couple of years.
It’s a no-brainer to list your home now, even with a bit of uncertainty in the marketplace.
Pick Your Sales Method
You’ll need to decide how you’ll sell the home. You could go through a real estate agent or sell it for cash.
The decision partially rests on the condition of the property. If you have a distressed property, you need to fix it up before listing the property.
That could cost more in repairs than you want to pay. It could be that the costs outweigh the benefits of selling, even in this market. There are ways to sell distressed houses quickly without investing a ton of cash to make repairs.
A home in good condition could get sold by a real estate agent or you can sell it yourself. There are pros and cons to each option.
Prep the Home for Sale
No matter how you sell the home, you’ll need to do some prep work to attract the best offers. Home sellers sense that this is the end of a golden era of high home prices.
They’re more likely to try to sell to capitalize while they still can. You’ll still get a good sales price, but you’ll have to work harder for it because there’s more competition.
Prepping the home for sale means that you need to work on curb appeal. Make minor repairs to the walkway, driveway, and landscaping to make the home attract attention from the curb.
How to Set a Home Price
Setting a home price in this market isn’t easy. You’ll want to look at recent sales over the last 90 days in your neighborhood.
Don’t compare your two-bedroom home with the five-bedroom home on the corner lot. Compare your home to properties similar to yours.
Look at the cost per square foot and calculate a sales price based on the average price per square foot of similar properties sold.
Your price will meet market demand and give you maximum value for the sale.
Predicting Home Prices
The real estate market has been on a wild ride over the last couple of years. It will slow down as interest rates climb, but home prices are going to be much higher than just a couple of years ago.
Follow the tips in this article and you’ll have a home listing that gets the attention of buyers.
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