The Unexpected Equity You've Accumulated Over the Years
There are many reasons why selling your home might be on your mind. As you weigh the possibilities, one challenge you might be facing is the current market’s affordability. If that’s a concern, taking a closer look at how much equity you’ve built in your home could make your decision clearer. Here are two main factors that play a significant role in your home equity growth: How Long You've Owned Your Home The length of time you’ve owned your property—also known as homeowner tenure—directly impacts your equity. Historically, from 1985 to 2009, the average homeowner stayed in their home for about six years before moving. However, more recent data from the National Association of Realtors (NAR) shows that number has risen, with the average tenure now being around 10 years. (see graph below): Why is this important? Over time, you build equity as you make mortgage payments and as your home increases in value. The longer you’ve stayed in your house, the more equity you’ve likely built, thanks to these two factors combined. Home Price Appreciation Over the Years Home prices have appreciated significantly over time, which also contributes to your equity growth. According to the Federal Housing Finance Agency (FHFA), homeowners who’ve stayed in their homes for five years have seen an average price increase of nearly 60%. Those who’ve held onto their homes for 30 years have seen their home values more than triple (see graph below): This appreciation can make a big difference when deciding to sell your home. Whether you’re downsizing, moving closer to loved ones, or simply ready for a change, the equity you’ve built can be a valuable asset for your next move. Bottom Line If you’re curious about how much equity you’ve built up over the years and how it could help you with your next home purchase, reach out today. Let's explore your options together.
Is Now the Right Time to Sell? Understanding the Lifestyle Factors at Play
Are you finding it tough to decide whether to sell your home now or wait? This is a common question, but here's an important angle to consider: your lifestyle could be the key factor influencing your decision. While financial considerations are crucial, personal lifestyle changes might be the real driving force behind the need to move sooner rather than later. Insights from the National Association of Realtors (NAR) annual report shed light on why many homeowners opt to sell. Interestingly, the top reasons all stem from major life events. As the accompanying chart illustrates: The data reveals that the desire to be closer to family or friends, the need for more space, or significant life events like marriage or the arrival of a new baby are the primary motivators for selling. Additionally, downsizing or job-related relocations are also common reasons. If you find yourself needing more space, different features, or amenities that your current home doesn’t offer, it might be time to consult with a real estate agent about selling. Your needs are important, and an experienced agent can guide you through your options and what to expect in today’s market, helping you make an informed decision that aligns with what matters most to you and your family. Moreover, your agent can help you assess your home’s equity and how it could facilitate your move to a new home that better suits your changing needs. Danielle Hale, Chief Economist at Realtor.com, notes: “Homeowners today should consider reviewing their home equity situation. With home prices up 40% over the past five years, many sellers are sitting on significant equity. This equity can help offset the costs of a new home purchase, making the transition smoother.” Conclusion Your lifestyle needs might be the push you need to make a move. If you're looking for advice on whether to sell your home, let's discuss your options and weigh the pros and cons together.
Are We Approaching a Balanced Housing Market?
If you’ve been monitoring the housing market in recent years, it’s clear that sellers have held the upper hand. But with inventory on the rise, could this be shifting? Let’s dive into what this might mean for the market. What Exactly Is a Balanced Market? A balanced market is typically defined as one where there is about a five-to-seven-month supply of homes available. In such a market, neither buyers nor sellers have a distinct advantage. Prices tend to stabilize, and there are more homes for buyers to consider. After a prolonged period where sellers dominated, a more balanced market would be a welcome change for those looking to buy. But are we really heading in that direction? At the beginning of the year, there was a three-month supply of homes nationwide. Now, inventory has increased to four months. While this may not seem like a dramatic change, it indicates that the market is slowly edging toward balance – though it’s not there yet. It’s important to understand that this rise in inventory doesn’t signal an oversupply that could lead to a market crash. Even with the recent increase, there still isn’t enough inventory to create such a scenario. The graph below, using data from the National Association of Realtors (NAR), shows how inventory levels have changed over time and where they currently stand: Current Market Conditions: A Shift, but Not a Drastic One For now, the market remains in seller’s territory – it’s just less intense than in previous years. Mark Fleming, Chief Economist at First American, puts it this way: “The faster housing supply increases, the more affordability improves and the strength of a seller’s market wanes.” What This Means for You and Your Move Here’s how these evolving conditions might affect you: Lawrence Yun, Chief Economist at NAR, notes: “Homes are staying on the market a bit longer, and sellers are getting fewer offers. More buyers are now insisting on home inspections and appraisals, and inventory is clearly rising on a national level.” The following graphs, using the latest data from NAR and Realtor.com, illustrate these changes: Homes Are Staying on the Market Longer: With more homes available, properties aren’t selling as quickly. For buyers, this means more time to find the right home. For sellers, it’s crucial to price your home competitively to attract buyers. Otherwise, they may opt for better-priced alternatives. Sellers Are Receiving Fewer Offers: As a seller, you may need to be more flexible with pricing or terms to close the deal. For buyers, the increased inventory means you’ll likely face less competition and have more choices. Fewer Buyers Are Waiving Inspections: Buyers now have more leverage, leading to fewer instances of waiving inspections. Sellers should be prepared to negotiate and address repair requests to keep the transaction moving forward. The Role of a Real Estate Agent Keep in mind that these trends are based on national data, and the market in your area may differ. That’s where a local real estate agent comes in. They can provide valuable insights into your specific market, helping you understand how these changes might impact your buying or selling strategy. Bottom Line The housing market is constantly evolving, and staying informed is key. Whether you’re buying or selling, understanding the shift toward a more balanced market can give you an edge. If you have questions or need professional guidance, don’t hesitate to reach out.
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