Most people understand that there is an annual cyclicality to the real estate market. Generally speaking, home sales peak around June and bottom out in November. However, what you may not realize is that the ratio of peak monthly home sales to minimum monthly home sales in Central Texas is only about 2:1. This is illustrated in the chart below, which shows monthly closed sales for the last 5 years.
As you can see, roughly half as many homes typically sell in November than in June. Still, that is a lot of homes! There is always plenty of market activity.
The question remains, however, whether this fall is a good time to buy or sell a home. To adequately answer that question we need to peer beyond the annual cyclicality of the market and take a look at the big picture.
Top 4 Reasons To Buy A Home This Fall
Here are four great reasons to consider buying a home today instead of waiting.
- Prices Will Continue to Rise
CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.2% over the next year.
The bottom in home prices has come and gone. Home values may continue to appreciate for years. Waiting no longer makes sense.
- Mortgage Interest Rates Are Projected to Increase
Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have hovered around 4%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase over the next year.
An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.
- Either Way, You are Paying a Mortgage
There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.
As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.
Are you ready to put your housing cost to work for you?
- It’s Time to Move on with Your Life
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.
But what if they weren’t? Would you wait?
Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.
If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.
Top 5 Reasons To Sell Your House This Fall
Here are five reasons listing your home for sale this fall makes sense.
- Demand Is Strong
The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong. These buyers are ready, willing and able to purchase… and are in the market right now!
Take advantage of the buyer activity currently in the market.
- There Is Less Competition Now
Housing inventory is still under the 6-month supply that is needed for a normal housing market. This means that, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market. This is good news for homeowners who have gained equity as their home values have increased. However, additional inventory could be coming to the market soon.
Historically, the average number of years a homeowner stayed in their home was six, but has jumped to an average of almost nine years since 2008. There is a pent-up desire for many homeowners to move and as home values continue to appreciate, more and more homeowners will put their homes up for sale.
The choices buyers have will continue to increase. Don’t wait until this other inventory comes to market before you decide to sell.
- The Process Will Be Quicker
Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and much simpler as buyers know exactly what they can afford before home shopping. According to Ellie Mae’s latest Origination Insights Report, the time to close a loan has dropped to 43 days, after seeing a 12-month high of 48 days in January.
- There Will Never Be a Better Time to Move Up
If your next move will be into a premium or luxury home, now is the time to move-up! The inventory of homes for sale at these higher price ranges has forced these markets into a buyer’s market. This means that if you are planning on selling a starter or trade-up home, your home will sell quickly AND you’ll be able to find a premium home to call your own!
Prices are projected to appreciate by 5.2% over the next year according to CoreLogic. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.
- It’s Time to Move on With Your Life
Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?
Only you know the answers to the questions above. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.
That is what is truly important.