Real estate is currently booming and experts attest that this is the strongest market since the 2006 price peak, but with the added benefit of market stability. The latest National Association of REALTORS® Confidence Index concluded that much of the country has experienced very strong, or strong buyer traffic. This is an indicator of demand, but not necessarily supply, which has been short in many states across the county. The latest highlights according to NAR indicate:
• First-time homebuyers accounted for 34 percent of sales.
• With fewer new foreclosures, distressed properties accounted for five percent of sales, purchases for investment purposes made up 15 percent of sales, and cash sales accounted for 21 percent of sales.
• Amid tight supply, half of the properties that sold in April 2017 were on the market for 29 days or less compared to 39 days in April 2016. The April median days on market measure is a new low since 2011.
• Lack of homes for sale was the main issue reported by REALTORS®. Respondents reported a mixed effect from the uptick in mortgage rates since November 2016; some buyers are encouraged to act quickly while others are discouraged by diminished affordability.
First-time buyers made up a large portion of activity in recent home sales, meaning it’s a great time to sell that investment condo or townhome if you’ve been holding on to it for more than a decade (12-15 years). According to NAR, buyers 34 and younger accounted for approximately 30 percent of residential buyers in April 2017, compared to 26 percent in 2013.
We’re now seeing many parents help their adult children make their first home purchase. Presenting cash for a 20 percent down payment isn’t the norm in this market. According to NAR, among first-time buyers, only 21 percent managed that and among all buyers, only 37 percent could avoid PMI (private mortgage insurance).
As interest rates are expected to rise, buyers are currently hitting open houses and searching for prime buying opportunities. There are currently no deals or steals, but a strong, stable market that both sellers and buyers can be confident in. Summertime is notorious for seeing an influx of buyers, so if you’re considering selling it’s an opportune time. The combination of near-peak real estate prices, and still-low interest rates, makes it a great time to get top-dollar for your home, whether an investment property or primary residence.