The market is hot, and you could be sitting on a pot of gold….seriously…who needs a rainbow?!
What Is Happening In Our Current Market?
- Homes are selling for an average of 8.4% more than one year ago! If you haven’t had your home valued recently by a market expert, it is definitely something you should investigate. You will likely have more equity than you think!
- The average national homeowner equity gain, year over year, is a whopping $55,000+. While we here in the Midwest are seeing a lower AVERAGE equity increase, we are certainly seeing that number continue to rise and there are pockets of Overland Park and Johnson County, Kansas in general where we ARE seeing those big numbers. The west coast has the largest increase with the east coast close behind.
- Average days on market has decreased 16% from 2021….homes are selling FAST!
- Home supply is down 30% from this time last year. This means your home is in HIGH demand!
As a point of reference, a seller’s market happens when demand exceeds supply. In Real Estate, we consider a 6 month supply of homes to be a relatively even market. A six-month supply means that six months is approximately the amount of time it would take to sell the current inventory of homes given the current sales pace. In that scenario, we would be seeing a moderate price appreciation. As that months’ supply level starts to go down, prices tend to go up more rapidly. In February, the Kansas City MLS (Multiple Listing Service) reported a .7 month supply….LESS than one month!! Our market is drastically skewed toward sellers right now.
- Many, many homes are selling “In It’s Present Condition”….which means the seller makes no repairs to the home. The days of sellers getting a laundry list of repairs to be made prior to closing are in the rearview mirror….for now anyway.
- Appraisal waiver anyone? This is also trending, as buyers accept the responsibility for any appraisal gap that may occur due to rapid price increases. Traditionally, when an appraisal comes in under the offer price, that price is renegotiated because the maximum amount lenders will finance is based on that value. Today, buyers are often willing to bring additional cash to the table and pay more than the appraised value for two reasons. First, they believe that by the time they need to sell, the rapidly rising market will accommodate the amount they might pay now above the current value. Secondly, competition is stiff. Buyers are employing any strategy they can think of to make their offer stand out.
What Does All Of This Mean To You?
That depends very much on your goals.
Move Up Opportunity
Is it an excellent “move-up” opportunity? The answer is yes. Many people are taking advantage of the opportunity to make a little extra on the sale of their current home and by doing so, increasing their purchase power for their next home. Will you also pay a higher price on the new home? Probably, but you will be building your equity now at that higher price point and living in the home you want.
Update Your Current Home
Many homeowners are taking advantage of the additional equity in their home by taking out a Home Equity Line of Credit to updating the home they are in. By reinvesting that money into your home, are you perhaps able to increase the value even more? Update a kitchen or bath, add an outdoor living area, finish a basement….these are all projects that will add value to your home.
Others are taking that same Home Equity Line of Credit and using the funds to purchase vacation homes. Where would YOU like to spend some time? (Of course, many of the states where you might want to purchase a vacation home, are also those same locales that are seeing the bigger equity gains….so be prepared for that)
Invest in Real Estate
Still, others are doing the exact same thing with a Home Equity Line of Credit, but using those additional funds to buy homes to rent or flip, building up their real estate investment portfolio. Even though property values are high right now, if you can find the right home to flip, the incredible demand will help you maximize on that investment. On the other hand…..historically, rent is one thing that just doesn’t generally go down. In our current market, rents have also been going up along with home values, and this is, for some people, a good way to create residual revenue.
While what you do with the equity you discover is unique to you, just knowing what you have to work with is the first step to opening up that door of possibilities! If you would like to know how all of this has impacted you specifically, let’s connect and find out!