Investors have flooded the residential real estate market over the last several years, but good news is on the horizon: Investors are exiting the market, making room for traditional home buyers. The financial markets continue to smile down on home buyers as well, with low rates and easier-to-obtain mortgages than have been seen in more than a decade. So if you've been thinking about selling your home and moving up, now may be the time!
Home Prices Reflect Healthy Trends
Home prices across the United States have continued their slow and steady growth toward the recovery everyone's been awaiting a long time. In fact, the median sale price for a single-family home or condo at the end of 2014 was at its highest level since 2008. This is good news for both buyers and sellers, as sellers are going to get more competitive prices for their homes and traditional buyers finally can compete in the market. Plus, since investors are clearing out, buyers have a nice variety of homes from which to choose.
A Buyer's and Seller's Market
In a healthy home market, a three-to-six-month supply of unsold inventory is a sign of good things. Right now, a four-to-six month supply exists in most parts of Southern California, which provides both buyers and sellers an advantage in today's market. In fact, total housing inventory increased, but it is still less than it was a year ago. And with more people ready to buy, that's a good thing on both sides. You won't have to wait long to sell your existing home, but you'll also have a nice selection of move-up homes.
Buyers Want Turnkey Homes
With a strong inventory from which to choose, buyers are looking for properties that are move-in ready and won't require much more than slapping a coat of paint on the walls. Many first-time buyers are entering the market, and they are less willing to take a chance on properties that need work. This means two things for you. If you're ready to sell, finish your upgrades and projects first to command top dollar. On the buying side, you may be able to find a bargain if you're willing to do some work and a few upgrades yourself. If not, expect to pay that same premium in exchange for having a move-in-ready home yourself.
Buying is Better than Renting
In most parts of the country today, it makes more financial sense to buy a home than to rent. Not only does it build equity, but it actually can also be cheaper on a per-month basis to buy a home. On average across the United States, renters spend about 30 percent of their income on rent, while buyers spend just 15 percent of their income on their mortgage payments. This is especially true today, thanks to historically low interest rates.
Credit is Looser
Home loan programs are available today that require only 3.5 percent down on a home, with rates still hovering below 4 percent. The Federal Housing Agency recently reduced the cost of mortgage insurance by a half of a percentage point. That may not sound like much, but it's going to save the average homebuyer about $900 a year. This makes it easier for first-time homebuyers to enter the market, and improves your odds for selling your home.
Over the past decade, there has been no better time to buy or sell a home than today. It's hard to compete with Southern California for desirable living. In the Yorba Linda area, the Edie Israel Team has the experienced agents you need to help you with all of your residential real estate needs.