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    Things to Consider When Selling Your House (Fall 2020), chapter 4

    Why Low Inventory Is a Win for Sellers

    Inventory is arguably the biggest challenge for buyers in today’s housing market. There are simply more buyers actively looking for homes to purchase than there are sellers selling them, so the scale is tipping in favor of the sellers.

    According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), total housing inventory is down 21.1% from one year ago. Inventory is well below what was available last year, and the houses that are coming to the market are selling very quickly.

    Sam Khater, Chief Economist at Freddie Mac notes:

    Simply put, new housing supply is not keeping up with rising demand. We estimate that the housing market is undersupplied by 3.3 million units, and the shortage is rising by about 300,000 units a year. More than half of all states have a housing shortage.

    Why is inventory so low?

    There are many reasons why it’s hard to find a home to buy today, stemming from an undersupply of newly constructed homes to sellers pressing pause on their moving plans due to the health pandemic. One of the key factors making it even more challenging, however, is the amount of time current homeowners are staying in their homes. There has truly been a fundamental shift in the market that started about 10 years ago: people are staying put longer, and it’s contributing to the shortage of houses for sale.

    In the 2019 Profile of Home Buyers and Sellers, NAR explained:

    In 2019, the median tenure for sellers was 10 years…After 2008, the median tenure in the home began to increase by one year each year. By 2011, the median tenure reached nine years, where it remained for three consecutive years, and jumped up again in 2014 to 10 years.

    Thankfully, with the strength the market has gained over the last 10 years, today’s homeowners are in a much better equity position. Now is a fantastic time for homeowners who are ready to make a move to break the 10-year trend and sell their houses, especially while buyer demand is so high, and inventory is so low. It’s a prime time to sell.

    In addition, with today’s historically low interest rates, there’s an opportunity for sellers to maintain a low monthly payment while getting more house for their money. Think: move-up home, more square footage, or finding the features you’re really looking for rather than doing costly renovations.

    Not sure if you’ll find something to buy? According to Chuck Fowke, Chairman of the National Home Builders Association (NAHB), “Builders are moving to ramp up production to meet growing demand.” With more new homes poised to enter the market this year, homeowners ready to make a move may have a golden opportunity to do so right now.

    Bottom Line

    There are simply not enough houses for sale today. If you’re ready to leverage your equity and sell your house, let’s connect. It’s a great time to move while demand for homes to buy is extremely high.

    Things to Consider When Selling Your House (Fall 2020), chapter 3

    Things to Consider When Selling Your House (Fall 2020), chapter 2

    Things to Consider When Selling Your House (Fall 2020), chapter 1

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