The Case-Shiller Index, a respected barometer of existing single family homes values offers 2013 statistics that bode well for prospective sellers. If you live in the Hendersonville area, now may be the time to list your property to realize profits that have not been possible since the recession first hit in 2008.
Low mortgage interest rates, pent-up demand, and more liberal lending standards all can contribute to a better selling price for your home.
Case-Shiller Offers Reason For Optimism
Standard & Poors established the Case-Shiller Index in 2000. It tracks the selling prices of existing single family homes in the twenty largest metropolitan areas in the country. Because those cites are spread out geographically, the index provides a fairly good sense of the overall residential real estate market. In 2013, the news for potential sellers is good — very good.
From February to March, the “Case-Shiller” tracked a 2.5-percent increase in home selling prices. That one-month increase nationwide was the largest single-month increase since the inception of the Index. The year-over-year figures were impressive as well. In April of 2013, existing single family homes sold at a price that was 12.1-percent higher than the previous April.
Mortgage Interest Rate Bonanza
Some of this increase is undoubtedly being fueled by record-low interest rates. Buyers are saving so much on interest that they are often willing to pay more for an in-demand property. At the same time, real estate values have stabilized to such a degree that many lenders have loosened the lending standards that were locking many buyers out of the market just a couple of years ago.
When it comes to the benefits of historically low interest rates, Hendersonville sellers are well-advised to act now. Why? Because interests rates have begun that inevitable climb back from those rock-bottom lows. It does not take much of an increase in interest rates to erode the purchasing power of the buyer. The key is to sell a home before the supply of buyers dwindles.
For example, when 30-year mortgage interest rates climb to 4.0-percent from 3.3-percent, as they now have. the average buyer has $12,000 less in buying power. That is, home buyers are seeing the maximum price that can be paid shrink by $12,000. Further increases in interest rates will simply reduce the number of qualified buyers that are available to consider your property.
Fewer Buyers On the Horizon
Recent price gains have been driven, in part, by the large number of buyers competing in the marketplace. For several years, very few homes were being sold. However, every day now, that glut of buyers is slowly returning to more normal levels. In May, the annualized rate of home sales nationally stood at $464,000. This was a large increase of 2.1-percent compared to April. At the same time, the year-over-year increase was a dramatic 29-percent. This means that large numbers of buyers have secured loans at low rates and then purchased homes.
At the same time, home builders are now starting to ramp up production. These new homes will siphon off some of the demand for existing homes. In essence, a greater supply of new homes will better balance supply and demand in the residential real estate market, and that will invariably reduce demand for existing homes. Again, it is better for the seller to enter the market before this trend fully takes hold.
A Perfect Time To Sell?
For the seller that has patiently waited for the grim effects of the recession to pass, now is the time to be rewarded for all that patience. Buyers are still out there in numbers, low interest rates are driving sales, and selling prices have rebounded. However, wait too long and the market may soften. Interest rates are on the rise, and much of the pent-up demand for homes has been addressed. Therefore, now is the time to act if you are a Hendersonville homeowner that has been wanting to sell.