Spring market presents a once-in-a-lifetime opportunity for sellers
Here’s a quick recap of why selling can be a smart move this spring:
- Springtime normally shows an influx of buyer activity. But with rates still low, homebuyer demand hasn’t waned. It’s an ideal time for sellers to take advantage. According to a recent Existing Home Sales report from the National Association of REALTORS® (NAR), home sales hit their highest point in 15 years last year; demand isn’t expected to drop this year.
- Sellers who may have been reluctant to list in the past few years are now considering it. The fact that housing inventory is at record lows has driven up prices – and potential profits — by 19.1 percent*. Increasing prices also indicate increasing home values, allowing a seller to tap into thousands of dollars in equity.
- Spring is a favorable season for move-up buyers. With supply so low and demand so high, sellers have the upper hand. A seller looking to trade up can expect to sell quickly and at a profit. Not only that, but a seller is likely to see multiple offers with more attractive contract terms — such as a flexible closing date and an option for leaseback to provide more time for the home search.
In a seller’s market — where the number of homebuyers outnumbers the number of homes for sale, as it does right now — buyers have to do whatever they can to grab a seller’s attention.
This includes getting prequalified for a mortgage early so a buyer is prepared to act before they start hunting. For sellers, this uptick in early approvals may make the selling process simpler and faster. It can also reduce the odds of an offer falling through; sellers typically pick prequalified buyers as a stronger bet in a multi-offer scenario.
Find out more about the benefits of selling this spring.
If you’re considering selling, it can also be comforting to know that we’re not anywhere near housing bubble territory.
Compared to the bubble seen a decade before, housing demand is legitimately strong, and inventory is very limited. Back then, buyer demand was temporarily fueled by what’s been called “irrational exuberance,” but current optimism in today’s housing market is backed by data.
Mortgage lending standards are also much more stringent than they were in the boom of the mid-2000s. The Mortgage Credit Availability Index (MCAI) now sits at 124.8 in contrast to the all-time high of 868 seen in 2006. A lower number reflects the difficulty of getting a mortgage.
CoreLogic’s Chief Economist Dr. Frank Nothaft confirms*:
“There are marked differences in today’s run-up in prices compared to 2005, which was a bubble fueled by risky loans and lenient underwriting. Today, loans with high-risk features are absent and mortgage underwriting is prudent.”
Unlike 2005/2006, housing demand in 2022 is real and not manufactured; the pandemic, and the low rates that came with it, have caused many households to rethink their need for stable housing and more functional indoor and outdoor spaces.
Adding to that, 12 times more homes in the U.S. are equity-rich than underwater, occurring when the combined loan amounts of these homes falls to 50 percent or less of their estimated market value. If you’re among the one in three homeowners who’s rich in equity, you’re in a prime position to sell.
Want to move even faster?
Prequalify before you list. It’s that easy. Once you find a new home you love, your loan officer will be ready and waiting to fast-track your loan to closing.
For educational purposes only. Please contact your qualified professional for specific guidance.
Sources deemed reliable but not guaranteed.