The COVID-19 pandemic caused millions of people to lose their jobs and severely crippled the U.S. economy. Yet, the housing market has shown remarkable resilience and emerged from 2020 stronger than ever. Bolstered by high demand, rising prices, and falling mortgage rates, many people are looking to both buy and sell property.
Reasons to Sell Your Home
Now that the economy is beginning to recover and people are returning to work, many homeowners are wondering if they should sell their homes.
Of course, if you just refinanced or don’t think you can afford your next house, it may be best to wait a short while. While selling could work in your favor, a short supply of fairly priced homes could also force you to settle and purchase a home you don’t really like.
Still, if you’re in the market for a new home, now is the ideal time to sell. Here are a few more reasons why 2021 is the year to list your house and find the home of your dreams.
1. Low Mortgage Rates
Last year, mortgage rates dipped lower than they’ve been in nearly 40 years. At just 2.71%, December’s rate was historical, and rates will likely remain low for most of 2021. Subsequently, there’s been a huge surge in buyer demand, and some homeowners would have little to no difficulty selling their homes in such a market. In fact, many are receiving offers that are at or well above their asking price.
These rates are also good news for those who wish to upgrade their homes or take out a second mortgage to purchase their next home. Instead of paying out the wazoo for another mortgage and receiving little to no return on home improvement investments, they’ll both save and make money in the long run.
2. Higher Home Values
As mortgage rates go down, home values continue to rise.
In the U.S., prices have gone up 8.4% over the past year and many experts have issued a positive forecast for housing prices throughout 2021. Brisk sales will mark spring and summer, followed by a slowdown in the fall and winter. Luxury housing, which continued to perform well during the pandemic, will likely lead rising home values well into next year.
After 2021, investors predict values will decelerate to a more normal growth rate. Therefore, if you’re in the market to sell, you might not want to wait another year to list your property.
3. Poor Market for First-Timers
Of course, higher prices aren’t exactly ideal for first-time homebuyers. Instead of using equity to purchase a home, they must save money for a down payment to receive a lower mortgage rate. Meanwhile, those with a house to sell can afford to pay more for their next abode because they’ve built equity.
Thus, current homeowners have the upper hand — and they haven’t hesitated to flex it. In October of last year, sales of previously owned houses jumped 4.3% from the previous month. This year, experts forecast home sales to rise by 10% to 6 million units.
4. Limited Housing Inventory
In October of last year, the housing inventory reached an all-time low — a 2.3 month supply. Typically, the housing market equalizes at a four to five-month supply, so sellers certainly had the advantage. Fueled by buyer demand, their home values increased and buyers fought to pay even more.
Now, middle-class buyers are beginning to pump the brakes on home-buying, at least when it comes to low to mid-priced properties. However, if you’re trying to sell a higher-priced home worth $100,000 to $250,000, you probably won’t notice a dip in demand. Why? Moderate earners may not be able to afford luxury, but the wealthy will have no problem snatching up your high-value home.
5. More Options in the Future
In the coming months, more people will catch on and put their homes on the market, which will inevitably reduce demand and cause home values to dip. This situation will flip the market in the buyer’s favor. Therefore, if you’re planning to relocate or purchase another home, you’d be wise to do so later this year or even early next year.
However, you’ll also want to sell your current home as soon as possible to secure a steady stream of potential buyers and a bigger return on investment. If you play your cards right, you could sell your home for a profit, spend less on your next one, and score a great rate on your mortgage.
Selling Your Home
If you decide to sell your home in 2021, you must first figure out how much your home is worth. Often, sellers overprice their homes. But in this case, you might make the mistake of underpricing your property.
Consider the price of other houses in your neighborhood or city and hire an appraiser to price your home accordingly. Whether you use a listing agent or not, you’ll want to ensure you sell your house at the right price. Sure, you might have to give your agent a cut of the profits, but you might make even more if you follow their expert advice.
Do you want to sell your home quicker at an even higher listing price? Make a few renovations. Today’s buyers are looking for energy-efficient appliances, hardwood flooring, and insulated windows, all of which offer a significant return on investment.
Many buyers also want exterior features like garages, patios, and lighting. Add more value by installing garage storage — which 85% of buyers want — or solar lighting features that will save the new owners more money in the long run.
The Choice Is Yours
If you’ve managed to build a fair amount of equity and want to relocate within the next few months, 2021 may be the best time to sell your home. In fact, it may be your final opportunity to make a profit and get a historically affordable mortgage.
However, the choice is ultimately yours. Speak with a real estate agent and your financial advisor to determine whether you should move or stay put for a while. After carefully weighing your options, you can make the right choice for you, your family, and your future, regardless of where you live.