Here’s a bit of a market update and what we can expect to see over the next few months and the rest of 2017. First of all, inventory is down 45% from where it was this time 2 years ago. What that means as an example is let’s say there were 10 buyers looking for a home, they had 9 homes and 1 condo to look at. Today, those same 10 buyers would have 5 homes and 1 condo to look at. So, obviously there are likely going to be multiple offer situations which always drives prices up. While we’ve seen interest rates go from 3.5% to about 4.25%, and expect them to perhaps reach 4.75% this year, it shouldn’t affect the number of buyers in the market and their motivation. The economy in our area remains good, people have jobs and want to buy houses. That will not be changing this year. So, with demand remaining constant, the supply shortage will continue to drive prices up. We’re expecting somewhere around a 7% increase this year—most of which will occur from March through June.
So, what does this mean for sellers? If you want to sell this year, let’s start talking now about getting your home ready to sell. Usually it takes a couple of months. Even though there’s a shortage of homes on the market, buyers are discerning and most buyers today don’t want to move into a fixer. What that means is your home will sell for significantly more money if you take the time to prepare it for market.
What this means for buyers is if you’re ready to go, start looking right now and be prepared to write a strong offer right now. You can either “ride the escalator” to the 7% increase, or you’ll be “taking the stairs”, meaning you can expect to pay 7% more when you find the right home. In real terms, a house that sold for $200,000 2 years ago will sell for $250,000 today, and will probably sell for $267,500 by this fall.