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Why Sellers Aren’t Worried About a Buyer’s Market
The real estate market saw a distinct shift at the beginning of the summer. Interest rates increased, and since then, the economy has continued to resemble recession-like conditions. Experts say that circumstances are slowly transforming current real estate conditions from a seller’s market to a buyer’s market around the country. So what does that mean for sellers? Should homeowners be worried about listing properties on the market?
Sellers shouldn’t sweat – it’s still a great time to sell your home
Just like a red-hot summer doesn’t instantly turn into sweater weather, the nation’s economic climate shift is also gradual. The past few years were enormously profitable for home sellers. Records broke month after month as demand rose and inventory remained high; banks lent with more liberal interest rates, so there was steep competition among buyers.
After that phenomenon, any shifts in the other direction will be noticeable. However, there is still a very healthy demand for homes in relation to the number of homes on the market. The market hasn’t frozen, and while it may be more competitive, home values still leave plenty of profits for home sellers, especially those who strategically list their homes after improving, repairing, and upgrading. That’s best practice to maximize profits regardless of the economy, but it’s critical right now.
Real estate market changes for sellers and buyers: the numbers
Let’s quantify this shift to put things in perspective. According to CEIC Data, housing prices rose steadily from 5.5% in January 2020 to 18.6% in October 2021. By March of this year, there was still a remarkable growth rate of 17.7% YoY housing price increase.
Since then, regional markets are still extremely high relative to previous data. Houwzer.com recently published that in Philadelphia’s market, the median home price for sellers in August 2022 was up 6.77% from July 2021, at $355,000. And in Orlando, that percentage increase is a surprising 16.96%, with a median home price of $400,000. These are not numbers that should induce panic in homeowners preparing to sell in the coming months.
While we’re not panicking, it’s wise to adjust expectations and prepare for the market to lose momentum through the year’s end. How come? Because interest rates were meager in 2020. It was common for prospective buyers to get approved for generous mortgages with interest rates between 3.5% to 4.5% (as shared by Next Advisor). Compare that to the national average of 5.5% for a 30-year mortgage in August 2022. When interest rates increase by just 1%, buyers’ monthly payments often go up by hundreds of dollars. That will, unfortunately, reduce the budget for many prospective buyers.
What does this mean for sellers eager to list their home? You’ll need a savvy pre-listing strategy. In short: get your plan in action now or wait – don’t list your home until it’s looking its best.
Begin pre-listing renovations now if you’re selling in 2022
The housing market is seasonal, meaning more sales are made in the spring and summer than in the cooler months. There are plenty of reasons for this. It’s easiest for families to move when school is out, and homes are all the more charming when the backyard is teeming with life, to name a few.
So, prepare for seasonality to lengthen the average time a house is on the market in the coming months. At the same time, economic changes are making the competition a bit steeper for sellers, with fewer buyers qualifying for mortgages. Logically, the pace of real estate transactions will create an even slower seasonal down shift, and there will be more listed homes on the market as the year winds down than in previous months.
If you’re motivated to sell in 2022, make plans now to address issues that could hinder the potential to sell your home for a sizable profit. In the last decade, buyers have been shying away from buying homes “as-is” and prefer cared-for homes in move-in-ready condition. Nearly every home can become more marketable with a refresh; newly painted interior walls enhance homes already in mint condition. If your home is dated or in need of repair, you must get plans in motion to modernize and fix it or be prepared to lose out on your highest earning potential.
Curbio can manage and finance essential home updates
From extensive structural repairs to staging, cleaning, and other cosmetic (yet valuable!) services, our award-winning home improvement solutions offer some relief, especially in more challenging economic and market conditions.
We’re a national company offering turn-key pre-listing renovations and upfront financing. We know it’s challenging to afford the critical updates needed to sell your home quickly and profitably, so we’ll manage every detail of your home improvements and handle the upfront expense. After you’ve sold your property (and increased its value), our no-interest, no-hidden fee project cost comes out of your profit.
Times are tough, but we’re innovating the home renovations industry and proud to give homeowners a leg up. Thousands of real estate agents and homeowners are happy they kicked their repair work to Curbio, and you will be, too. Don’t sweat the market. Get your free, same-day estimate and prepare for a successful home sale.