With such a vibrant homes market in the Albuquerque area at present, there is a temptation for sellers to assume that delaying listing their property could lead to even better returns on the sale in the future, especially if they have the luxury of being able to wait.
Such decisions to procrastinate are, of course, ultimately always a judgement call. They are also something of a gamble, given how quickly things can change in the real estate, both positively and negatively.
Today we'd like to suggest five key factors that help to explain why playing a waiting game may carry quite a lot of risk:
Mortgage rates have been riding their luck for years - We've documented the story of mortgage rates so thoroughly in this blog that it barely needs detailed repetition. Suffice it to say, therefore, that predictions of quite significant home loan interest rate rises have been a part of the landscape for many years and yet, every single time they've supposed to have headed north, something has happened to keep them low, either to the home or global economy, or some other international crisis. As we've emerged out of the recession years, there has still been a legacy of risk aversion occuring at what sometimes seems like the slightest provocation. This tends to stimulate a return to safe haven investments, such as bonds, which has the knock on effect of keeping mortgage rates down. Clearly the situation cannot last forever and, at the moment we're about a percentage point beneath where almost all experts expected us to be by now. Everyone should recognize that this cannot last forever and, even worse, we won't know that this incredible perfect storm wave we've been riding for so long will begin to subside.
Buyer sentiment can be fickle - Naturally, low mortgage rates underpin the current excellent market conditions, as buyers rush to lock in low rates while they still can. But just as investors can be fickle, so can buyers and it doesn't take much to start affecting their level of purchasing confidence. While the current national and global economic situation has helped put the brakes on the Federal Reserve's immediate plans to raise interest rates, these will start to bite at some unknown point sooner or later. Although these rates don't have a close relationship with mortgage rates, they will result in other borrowing, such as credit cards, becoming more expensive. Right now, there are so many great reasons for buyers to make positive decisions - who knows how long it will last, however.
There's an election in November - OK, no matter what the result, we aren't going to wake up to a very different world the day after the election. Nonetheless we are entering a time when there is the potential at least for significant changes to the way the country has been run for the past few years. We have an outgoing President who has served two terms, so it's more or less a given that some things will change, even if the Democrats win. While it is far, far too early to speculate what those changes might be, and how financial markets and home buyers may react to them, it's still wise to acknowledge the uncertainties an election presents. In fairness we could be looking at an even better situation for real estate, but only time will tell on that. The advantage of listing right now is to be ahead of this unpredictable curve, so that it isn't a factor in your property sale.
Your own circumstances could change too - If you're in good shape, financially and otherwise, to make a move at the moment then its certainly arguable that you should seize the moment. None of us can predict what the future holds, so it's best to recognize current windows of opportunity for what they are and to act on them. With such phenomenally positive market conditions at present, why take a chance on the goalposts moving?
Low inventory levels won't last forever - We've also written a lot in these blogs about low inventory of available homes for sale and how it benefits sellers by reducing competition at all price levels and facilitating a far greater degree of robustness in asking prices, often resulting in higher multiple offers, due to huge demand and short supply. The reasons behind low inventory in such a sparkling market are quite complex and, at least partially, have their roots in the recession and the fact that some homeowners are already locked in to very low mortgage rates. However, as we explained on Tuesday, negative equity, another reason for not selling, has been coming down quite dramatically over the past year. It's therefore highly likely that more sellers will appear on the market as the feelgood factor of having equity becomes more widespread. In recent months, we've seen a couple of false dawns for a slight turnaround in inventory levels. Only time will tell if they are the first tentative signs of recovery in supply levels. Be sure, however, that when more significant home stock hits the market there will be a quite fast knock-on effect of reduced prices, at least until things stabilize again.
In the end, of course, the decision to sell a home is yours and yours alone and, as everyone's situation is entirely individual, there's no cookie cutter set of reasons for acting now or delaying. What we hope the above points will reinforce, however, is that there are so many positively trending indicators of a sellers' market that it's very easy to justify not putting off your sale any longer.
Call us today for the best assistance in helping you come to the right decision in your own circumstances.