It’s a great time to sell! There are very few properties on the market and buyers have been energized by record-low interest rates. The lack of inventory is primarily driven by real estate investment trusts (REITs), hedge funds, and top investors having been given opportunity to buy $billions worth of non performing assets directly from several large banks and government entities. Those investor purchases have had a dramatic effect on the number of homes available because bank owned foreclosures were such a prominent part of the housing supply.
Prices have now increased in some areas faster in the last year than they had in the previous three years total. As buyers raced to lock their loans under 4% they often only had two choices, to not get a home, or to outbid everyone else. Interest rates were so low, and asking prices on homes were still so far below where they had been 6 years ago that it made sense.
We have seen near weekly price increases in some areas of Southern California, like Riverside County including areas of Lake Elsinore, Temecula and Murrieta. As rates and prices continue to rise, expect to see buyer activity subside in kind. As more and more sellers try to catch the wave, it will mean more competition amongst them with fewer buyers in the market. New home construction is also on the rise and may represent additional competition for sellers as their numbers increase, while the gap between resale home prices and new home prices continues to narrow.
It seems as though right now is an ideal time to sell for top dollar.
July 27, 2013.