How Supply and Demand Principles Mean Great News for Homeowners
The real estate market looks different than it did a few years ago. Buyers are desperately searching for new homes, but are having trouble finding them. Homes are on the market for less time than ever before. Multiple offers are a phenomenon that used to be an urban legend, but now they’re the norm for home sales. Here in New Jersey, homes are selling 9% faster than they did a year ago.
Although homes are in high demand, homeowners are hesitant to list their homes and make a move. This combination of factors is driving home prices up like never before. A lack of supply but a high demand means great things for sellers. It means that sellers are able to sell their homes for a much higher price!
Lest sellers think that new construction is picking up the slack of limited supply, it simply isn’t. New construction homes aren’t being built fast enough to satiate the appetites of home buyers. Buyers are looking to buy homes from buyers in established areas. Things are complicated for buyers because these sellers just aren’t selling.
Here in New Jersey, new listings have decreased by 8% from 2017 according to the New Jersey Multiple Listing Service. The median sale price has taken a dramatic and exciting jump up by 6.3% in the past year. So, not only could your New Jersey home sell quickly if priced right because of a lack of new listings, it will sell for a good deal more money than before. In more concrete terms, the sale prices for New Jersey homes went from an average sale price of $360,000 to $382,500 in one short year!
The reasons that homeowners are hesitant to sell are many. Some homeowners fear losing their mortgage rates as the rates are increasing. It’s important to note, though, that mortgage rates are rising but still remain at all-time lows. Another reason for hesitation is fear of finding another home. With homes being scarce, this is a concern. It’s important to note that the sale of a home stands to make sellers a good deal more money than they would have made in previous years. Increased sale prices mean that buyers will have much greater flexibility in paying for their new home.
In many cases, home prices don’t reflect supply and demand principles right away. There’s usually a lag time before the increase in demand is represented in prices. Interestingly, in the current market, home prices are quickly catching up and reflecting the increase in demand. Homeowners stand to reap the rewards by selling their home for higher prices and pocketing the difference. It’s a great time to be a seller, and now is the time to list your home while the market is hot. Call me today, I’d love to answer questions about this exciting market and talk to you about how you can benefit from it.