Waiting to List Your Home for Sale Could Cost You
Many of my clients are still ‘on the fence’ to list their home to sell and to look for a new place to call home. Some sell and buy a new home after various life changes; growing family, empty nesters, retirement, divorce, etc. However, here are some powerful reasons why 2016 is the year to buy and sell Real Estate:
Interest Rates – For the first time in a decade, the Federal Reserve raised interest rates. It was bound to happen because rates were very low for far too long. To correct this, many economists and those at the Fed are speculating that interest rates will continue to rise throughout the year. When the Fed raises the Fed Funds rate by a .25% it doesn’t do too much to the mortgage rates out there from the banks. But a significant rise in interest rates will put more buyers out of shopping for a home. I’d say interest rates would be at or above 5% by spring 2016. This will lead to reason number two.
The Market is Cooling Off – The appreciation of homes in Anchorage has been a modest 2-4% annually for the last four years. This has been great for our market but the residential average sales price increase only 2.15% in 2015, showing a cooling off period for our market. I suspect we won’t see a major increase in average sales price increase in 2016 but I predict that a 0% increase in home values should be lowest expected for the year. But again, as the market cools off and interest rates rise, waiting until the summer months may not be in your best interest.
Alaska’s Economic Climate – The talk of the town surrounds Alaska’s current economic climate and many are hesitant to make any serious housing decisions amidst uncertainty. We were uncertain seven years ago during the most recent crash and Alaska recovered from the oil bust in the 1980s. There are several industry sectors that have grown in Alaska and our government will have to make some tough decisions.
Let these uncertain times help you carefully consider your current housing situation and how that fits into your goals and aspirations for the New Year. I have several clients who want to ‘upsell’ before interest rates climb and make it harder to make a deal. Don’t wait! Let’s talk, 907-762-3123 or email me now.
Recovery, the real estate “buzz word”, is
officially a thing of the past as of 2015. Real Estate prices across the nation
are at or above the ‘pre-crash’ levels and it is my belief that a strong market
is here to stay. With that said, Real Estate is still cyclical, it has its ups
and downs just like any other business. The Federal Reserve won’t be addressing
the current mortgage rates until December this year so buyers still have low
interest rates to entice them into the market. Low inventory of homes on the
market is still creating a lot of demand, higher list to sales price, and lower
average days on market! But there appears to be some trepidation in recent
months from sellers following some uneasy in the stock market in recent months.
According to national statistics there has been an average of 7% total increase in home values, year over year, since 2011. In the Anchorage market, we have had a total increase in home value of 11.93% since 2011. Our average home value is significantly higher than the national average but we didn’t have nearly the recovery issue the rest of the country faced.
I would expect a market correction next year because of this. This doesn’t mean values will necessarily go down but we won’t have as high a percentage increase in home values in 2016 and worse case scenario will be 0% increase. A 3% gain in 2014 and 2015 is great! But my guy feeling is we may see a small increase in home values next year. This will greatly depend on what the Federal Reserve decides to do with interest rates and the availability of credit at the beginning of the year. It has been and may likely be that interest rates will go up and as the markets ‘cool-off’ from recovery we may see a dip in the percent increase. I track these numbers persistently for the benefit of my clients. It is my hope as the awesome summer our market saw cools off with the weather, all my clients stay optimistic for the coming year! Let me know by liking my Facebook page or contacting me with your questions or if I can help! I’ve been in this business for 25 years and cultivate the tools and resources to sell homes fast and at top dollar. Email firstname.lastname@example.org or call 907-762-3123.