Timing is everything, especially in sales. And now is the best time to take advantage of the tremendous opportunities out there for homeowners looking to sell. The problem lies in convincing nervous clients of that. The pandemic has, for the most part, caused many homeowners to be afraid to make a “move” of any kind. In fact, many are simply content with being patient in the market, dating back to April. And who could blame them?
As an agent, you are used to wearing many hats… sometimes builder… sometimes banker. Now you need to think like an educator. You need to share your knowledge of the market, the financial merits of selling at the right time, and the rewards of getting the deal of a lifetime.
Here are some cliff notes of the main benefits of selling now that you can share with your clients:
1) Low Interest Rates
Before the first Covid-19 case was reported, most REALTORS® and economists felt mortgage interest rates in the United States would fall under 4% for most of 2020. However, the onset of the pandemic sent mortgage interest rates to record lows.
In early March of 2020, the 30-year fixed rate mortgage hit a record 50-year low of 3.29%. The record low rate for the benchmark mortgage loan prompted an overwhelming amount of interest from home buyers, causing mortgage purchase applications to jump significantly. The demand for 30-year mortgages forced many lenders to ramp up the resources required to process home loans.
2) Low Home Inventory
Lawrence Yun, chief economist of the NAR, said “There was insufficient supply last year.” Now, due to the uncertainty of the pandemic and the overall patience of potential home sellers, the inventory of homes of homes reached a five-year low in March of 2020. Also playing into the low inventory is something that has nothing to do with the virus – people are also just living in their homes longer (read more about that here).
The law of supply and demand has put home sellers in an enviable position for negotiation. With current demand high, the low inventory has created an advantage for home sellers on the market.
3) Starter Homes
Many real estate analysts believe that now is a great time to sell, especially if your house is considered a “starter home.” Although the pandemic has hit upper-end homes hard, starter homes remain in high demand for buyers. Even with most states implementing health orders, entry level homes remain highly active in the home-selling market. Subsequently, single family homes increased in price by an average of 7.7%.
4) Relocation, Relocation, Relocation
Americans are on the move, as they evaluate what the new normal might be for them. As we talked about in a previous article, many buyers are reconsidering their “wants” and putting more emphasis on space. That is being seen in the shift in buyers moving from densely populated cities to the more spacious rural and suburban locales in the U.S.
Whether it’s an important job change or the desire to live in a more suburban area, the key goal is relocation. This creates more opportunities for sellers to negotiate the best deals on all types of homes in a variety of areas around the country.
5) Economy is Showing Signs of Recovery
There’s no denying that the economy took a big hit in March of this year, sending home sales into a downward spiral. Now, nearly, four months later, the economy is showing signs of recovery. Although the pandemic lowered business investments and consumer spending in March, April and the first half of May, things are beginning to look up. Both business investments and consumer spending have jumped substantially over the last two months. An increase in consumer spending, coupled with low housing inventory, signals an ideal time for sellers to list.
Although home sellers are a bit jittery right now about making any type of move, you have the unique opportunity to point them in the right direction. If you’ve done your homework, you’ll have no problem convincing them that now is a great time to sell. And as always, a happy client leads to more referrals!
*Not all borrowers will qualify. Contact us for more information on fees and terms.
Caplan, Bryan. “Why Now Is a Good Time to Sell Your House.” Jared Erhart Real Estate Team, Jared Erhart Real Estate Team, 8 July 2020, www.jarederhart. com/blog/why-now-is-a-good-time-to-sell-your-house.
Sweeney, Erica. “6 Reasons Why This Is Actually the Best Time in Years To Sell a House>.” Real Estate News and Advice | Realtor.com®, Realtor.com, 9 July 2020, www.realtor. com/advice/sell/reasons-why-now-is-a-good-time-to-sell-a-house/.