When is the Next Right Time to Buy and Sell Real Estate

When is the Next Right Time to Buy and Sell Real Estate in Columbus?We know that our clients are always looking to time the market right. Whether you are planning to buy or sell a home in Columbus, pay attention to these market conditions that mean now might be the best time to work toward your real estate goals. While no one has a crystal ball, experts agree that now may be the best time for many years to make a move in real estate.

Significant Home Price Appreciation

Home prices have experienced a substantial increase, with a surge of 47.1% since the start of 2020. This growth rate surpasses any gains seen in recent decades. According to an analysis by ResiClub of the Case-Shiller National Home Price Index, house prices in the 1990s and 2010s grew by 30.1% and 44.7%, respectively.

The current decade's price growth is on the verge of surpassing the 47.3% increase seen in the 2000s, a period marked by an 80% spike before the 2007 housing market crash. Years of underbuilding have created a shortage of homes, a problem exacerbated by the rapid rise in mortgage rates and expensive construction materials.

The available home supply has decreased significantly, down 34.3% from typical levels before the COVID-19 pandemic, as reported by Realtor.com. This reduction in supply, coupled with strong demand, has created a competitive market. Sellers can benefit from higher home prices, while buyers need to act quickly to secure properties. All of this contributes to a supply-demand dynamic that works in your favor. 

The "Golden Handcuff" Effect

I reached out to Gregg Camp from Property in Santa Cruz and he added this:

"Higher mortgage rates over the past three years have created a "golden handcuff" effect in the housing market. Many homeowners locked in record-low mortgage rates of 3% or less during the pandemic which now make them reluctant to sell, limiting the supply of homes on the market. This reluctance to sell leaves fewer options for eager buyers, further driving up prices."

Economists predict that mortgage rates will remain elevated in 2024 and will only begin to fall once the Federal Reserve starts cutting rates. Even then, rates are unlikely to return to the lows seen during the pandemic. Mortgage buyer Freddie Mac reported that the average rate on a 30-year loan recently fell to 7.09%, down from a peak of 7.79% in the fall of 2023, but still significantly higher than the pandemic-era lows of just 3%.

Willingness to Sell

A survey by Zillow found that homeowners are nearly twice as willing to sell their homes if their mortgage rate is 5% or higher, and right now about 80% of mortgage holders have a rate below 5%. This suggests that as rates stabilize or slightly decrease, more homeowners may consider selling, potentially increasing the inventory of homes on the market.

What does that mean for you if you want to sell your home in Columbus? Now is the time. Sellers can take advantage of the high demand and low supply by listing their properties at competitive prices. The current market conditions are favorable for sellers to maximize their returns, especially if they have substantial equity built up from the recent appreciation in home values.

Challenges for Buyers

A survey conducted by Redfin highlights that the combination of steep mortgage rates and elevated home prices has pushed the median monthly housing payment to a record $2,775, which is an 11% increase from the same time last year. Despite these challenges, the fundamental demand for housing remains strong, driven by demographics and a robust labor market.

Nationwide senior economist Ben Ayers notes that market conditions for homebuyers remain challenging with few homes listed and rising ownership costs. ", in particular, are finding it difficult to enter the market due to elevated financing rates and increasing prices.

If you are able to navigate these challenges right now, you can benefit from locking in properties at current rates before prices and rates rise further, as experts expect them to do in the near future.

Bill Gassett, owner of Maximum Real Estate Exposure, provided helpful advice on buying homes in the current market.

"Buying in the current environment is a significant challenge for many buyers. Inventory is very tight, which has caused home prices to continue rising. Buyers are often caught up in bidding wars to get into a house they love. Couple that with the rise of interest rates and the fact that housing is more expensive than ever, and things get tough.

If you know you want to buy, holding out because of an interest rate isn't usually wise. Many say, "Marry the house, date the rate." You can always refinance into a better mortgage when rates drop. However, that house you love will only be for sale if someone scoops it up.

Most predict rates to drop soon, so you may not have to wait long. But even if they don't drop immediately, you can be patient and watch them while building equity instead of giving it to your landlord."

Economic Recovery and Stability

The economy is gradually recovering from its recent downturns, with job growth and consumer confidence on the rise. This economic stability is creating a strong real estate market, as buyers feel more secure in making significant financial commitments and sellers are confident they can find interested buyers.

The long story short is this: real estate continues to be seen as a solid long-term investment. Property values are expected to appreciate, making now a good time to invest in real estate. For investors, purchasing property during this period can lead to significant returns as the market continues to strengthen. And for sellers, it's a great time to get ahead of the curve and make deals with savvy buyers. 

Ready to find the right home for sale in Columbus, or the right buyer? We're here to help, so contact us any time. 

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