If you’re a seller then now is a great time to put your home on the market. If you’re only just thinking of selling, then you may not have much time left to take advantage of market conditions.
For the last two years, home prices have been steadily increasing. To the benefit of sellers, higher median prices have done nothing to stifle demand. With low inventory, homes in some of the most expensive residential areas of the United States are spending no more than 30 days on the market, on average.
The Economy Won’t Keep Growing Forever
On May 22nd of 2018, Zillow Real Estate released details of a survey that incorporated data from more than 100 economists and real estate experts. Focused on the future of the housing market, the survey had some interesting insights and even a prediction of when the next economic recession would begin.
The American economy has been in one of the longest stages of continuous growth that we’ve seen in recent history. However, with all growth there is eventually a plateau and a decline. The survey predicts that the next economic recession could begin by 2020.
A recession doesn’t always mean a major downturn of the economy, such as was seen in the last major recession. Instead, it simply means that growth will stop. While the results might not be crippling, there will be a significant impact on investors and the general public.
Aaron Terrazas, a senior economist from Zillow, said in a press release “As we close in on the longest economic expansion this country has ever seen, meaningfully higher interest rates should eventually slow the frentic pace of home value appreciation that we have seen over the past few years; a welcome respite for would-be buyers.”
Selling?, Power Will Shift from Sellers to Buyers
Today, sellers are in a strong position. In the same report by Zillow, it was predicted that home values could grow by over 5% in 2018. Today, it’s a seller’s market. With any economic plateau or downturn, the power will quickly shift to buyers.
Rates will increase, demand will drop, and prices will inevitably fall. This means that if you wait too long, you’re not going to have the same financial returns that will be possible if you sell your home within the next two years.
Rising interest rates are the biggest threat to demand, and the Federal Reserve has indicated that there will be more increases throughout this year and the next. If you’re in a position where you can sell a home to upgrade, to downgrade for retirement, or if you are selling an investment property, then now is the time to talk to your realtor and get your property listed on the market.
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