Currently sellers control the real estate market across the state, but for how long? We can say with absolute certainty that 2021 is the best time for a seller to sell that we have seen, ever.
What typically happens is sellers see the market going up and they believe it will always be higher next year, so they wait. The problem with that strategy is twofold. Prices may be higher next year. If they are, when they go to sell, whatever they buy next year will also be higher.
If prices max out in 2021, they waited too long and missed the mark. In a rising market sellers generally hold out. The market does not give you a warning sign that it is about to turn. It just happens, and sellers inevitably wish they had sold the year prior. We saw this after 2005.
We are not saying market conditions are the same as 2005. Back then we had over-supply of homes. We do not have that now. In fact, construction needs to pick up the pace to keep up with Florida demand. All we are saying is, the market is hot right now, and that will not last forever. When it eventually runs out, some people will wish they pulled the trigger sooner.
Unfortunately, many will miss this opportunity, and they will not be able to sell in the future. Perhaps they owe too much, or interest rates move higher and they cannot afford as much home as they could this year.
When interest rates rise, and they will at some point, it hurts buyers and sellers. Buyers can afford less, which is less fuel for the market to rise. Sellers who decide to sell when interest rates are increasing will face higher financing costs too. In essence, it will limit how much they can afford if they are getting a mortgage.
Essentially sellers get hit with a double whammy. Increased costs when they buy their next home and fewer buyers able to afford their current home. Rising interest rates can put downward pressure on home prices unless demand is sky high. Today demand is sky high, but what if it’s not next year? And, what if interest rates are higher next year?
When the market gets so one-sided there is generally opportunity in there somewhere. Right now, we believe the opportunity lies with the seller. Sellers have everything to gain by selling now and have the most to risk by holding out another year or two. We are not saying prices will drop or the market will turn. If things stay the same, there is more fuel for this hot market.
All we are saying is, what if things do not stay the same? We have a new administration coming into Washington. They will implement new pans, new taxes, etc. Some of these things may take a while to implement, while others may be sudden. The long-term effects of such policies might take a while to kick in.
Nobody knows the future. We do know the present, and presently the sellers control the real estate market in almost all scenarios. Visit Reali for more real estate information and guidance.
If you have been thinking about taking advantage of this market and just want to know your options, reach out to Brett or Sande Ellis. 239-310-6500 or visit www.SWFLhomevalues.com We’ll be glad to look at today’s pricing with you and discuss your options.
Next year you may look back on 2021 and wished you had called us. A phone call to find out cannot hurt you but waiting could. Brett and Sande are easy to talk to, and we present you with your options. We are not pushy, and we like to have fun with our clients. Give Sande or Brett a call, you’ll be glad you did.