Just a hint…….YES!
The market is changing… but is it a good time to sell your home?
Last month we posted an article titled 5 Things About the Baytown Market You Need To Know, in which we expressed that the current market is a good one for sellers. However, the market is shifting out of your favor; changing trends are creating an urgency for sellers to move quickly.
In this article, we will outline the trends impacting your home’s value in Baytown and discuss why now is a good time to sell your home and prepare for your future.
● Unemployment Rates Are Rising: As of July 2018, unemployment rates in Baytown, Texas remain over 10% and display no signs of improvement. Not only do rising unemployment rates shrink the buying pool, but they also discourage individuals from entering the property market due to personal fears related to their economic futures.
● Foreclosure Rates Are Increasing: The economy in Baytown is struggling, and the area is experiencing an economic decline. Not only are unemployment rates rising, but annual home incomes are also declining, creating an increase in foreclosed homes. How does this affect potential sellers? Foreclosure rates in Baytown here.
1. Increased foreclosure rates indicate a smaller pool of potential buyers, and
2. More foreclosed homes on the market means housing prices shift downwards, creating more competition for you to sell your home (Foreclosed homes offer the opportunity for a discounted price on properties).
● Interest Rates Are Rising: During the week of July 26, 2018, the 30-year fixed-rate mortgage averaged 4.54%, up two basis points according to the weekly data from mortgage provider Freddie Mac. The 15-year fixed-rate mortgage averaged 4.02%, also up two basis points. Why does this matter? Rising interest rates equate to more expensive borrowing.
● Housing Prices Remain High: Despite the economy’s downturn and the increase in interest rates, housing prices remain high. Supply still remains low in Baytown, Texas, providing a competitive advantage to potential sellers. If supply increases however, housing prices drop due to increased competition in the market.
What Does This All Mean?
Many economists are suggesting that the housing cycle is reaching its end. Looking at a broader perspective – that of the housing market across the nation – the supply of homes in the second quarter of 2018 rose to three times the rate of the previous year– the highest jump in inventory the US economy has seen in three years!
By historically reviewing real estate trends, analysts can decipher anticipated trends in the market, and the current shift towards a slowing market in the national housing market indicates that we may be transitioning towards a buyer’s market.
What does this mean for the homeowner? Well, it may be time to sell. If you were thinking about selling now or in the future, it may be time to get on the ball. The downward trend that analysts predict over the next six months will create a small window of opportunity for potential sellers. If sellers are uncertain about their decision, they may risk losing their opportunity to sell when the market is in their favor, ultimately decreasing their potential return on the property.
Selling now may even create a new opportunity for the homeowner to prepare for the declining real estate market.
What Can You Do WHEN You Sell?
1) Move to an economically stronger neighborhood that provides a more secure asset. Purchasing in an area that has higher rental rates and lower unemployment rates can create more stability for the long term value of your home.
2) With the declining market, investing in a property that creates potential for income can be a smart move. If the market does continue to shift downwards, and more individuals are forced out of their homes, a higher demand for rental units is created. Smart property owners will prepare for this shift and purchase an asset the provides an option for monthly income via renting.
If you are still questioning what the best decision is for you or have questions about the market, it may be time to reach out and discuss your options with a professional. There is no Magic 8 Ball that can tell you the future of the real estate market, but there are educated professionals who can give you a research-based analysis of what your future may hold. We here at Gulf State Homebuyers can provide you with a free consultation, educating you not only on the market but also on the value of your home.
To get started, just contact us, and one of our agents would be happy to assist you.