If you have been watching from the sidelines as the real estate market goes absolutely nuts over the last couple of years, chances are you have been missing out on a fantastic opportunity. Let’s kickstart your motivation to put your home on the market by looking at the number one reason why you need to sell your house in Phoenix.
The Big Reason to Sell: We Are in a Booming Seller’s Market
As part of paying attention to your local real estate market at any point in time over the last few years, you’ve certainly heard that we are in a seller’s market. What this means is that the market conditions are right for sellers to be able to easily sell their homes while having serious leverage to get what they want out of negotiations.
Plain and simple: Sellers have the upper hand in just about any real estate transaction happening right now, but that could change in the course of time. Market conditions won’t stay this way forever, and opting to sell your home in Phoenix now to take advantage of the market is advisable.
One of the largest factors influencing the price of homes has been the constant, seemingly insatiable demand for homes from buyers.
Some buyers have been searching and competing to purchase homes for two or three years, and they have taken this time to maximize their savings along the way. Buyers are finding themselves in an unenviable position because of how common it is for multiple buyers to swoop in on a desirable home and start an aggressive bidding war.
Buyers then start one-upping each other with counter offers until the seller pulls the plug on the bidding war by accepting an offer.
You may be asking why a seller would possibly make the decision to end the bidding war, but they have good reason to not let things get out of control. Most buyers will be depending on at least some financing from a mortgage lender, and that lender doesn’t want to issue a loan for a property with a value that is likely to decrease substantially in the coming years.
If buyers keep letting their bids climb, eventually the closing price on your home may be so out of whack with normal market conditions that lenders aren’t willing to take on a home loan that would leave them holding the bag if the buyer defaults down the road. That’s why, even if the market is clearly in their favor, sellers need to keep their cool and know when to make the call to shut down the buyer fervor.
As the complementary component to high demand driving the seller’s market, exceedingly low numbers of homes on the market greatly strengthen the power sellers have over the entire buyer pool.
Due to the Federal Reserve lowering interest rates to record lows in the last two years, many homeowners that might have sold instead decided to refinance. This provided them an opportunity to keep their current homes while lowering the total amount of money they will be paying for their mortgage in the long run. However, interest rates have increased considerably on three separate occasions in the last year and a half, and this brings more sellers out of the woodwork.
Even with more sellers showing up, the supply of homes is vastly outweighed by demand. With fewer homes on the market, this makes it easier for you to shine compared to the competition when you sell your house in Phoenix. This is also another factor that is temporary, and further adjustments to interest rates could bring the supply of homes more in line with demand.