Real estate made headline news in December, with home sales up 3.6% or 5.54 million units, the highest sales pace since February 2018, according the National Association of Realtors.
Due to mortgage rates being a full percent lower than the same time last year, sales were up 10.8% year over year.
Inventory made the most significant news, as the number of homes for sale hit an all-time record low of 1.4 million, down 8.5%. This is the lowest supply of homes for sale since 1982 when inventory started being recorded. ( Existing Home Sales Climb 3.6% in December)
Factors Affecting the Real Estate Market
In a strong economy, with steady job growth, low unemployment, and mortgage rates remaining relatively low, economists predict the real estate market will remain strong.
Lawrence Yun, NAR’s chief economist, states, “We saw the year come to a close with the economy churning out 2.3 million jobs, mortgage rates below 4% and housing starts ramp up to 1.6 million on an annual basis,” he said. “If these factors are sustained in 2020, we will see a notable pickup in home sales in 2020.”
Millennials remain a large force of the buyer’s market in 2020, as well as other First-Time Homebuyers. However, the shift in homeowners staying in their homes longer, 13 years versus 7 formerly, creates a lack of inventory in the market and a surplus of buyers.
The supply and demand principle then lends itself to higher market prices and more competition, which could edge out some of the buyers.
Should You Stay or Should You Go?
The ultimate decision to sell or purchase a home is ultimately up to you. Sellers have the edge right now, but buyers have the incentive. With the spring market coming upon us, now is a great time to make the decision to sell or buy.
Without a crystal ball, we do not know how the market is going to fair in the next few years, so sitting tight and holding onto your asset remains unpredictable.
If you are thinking of cashing out in the near future, your chance of getting a lot of interest in your home, which equate to a higher amount, is in your favor.
Is Now the Right Time to Buy?
Depending on your situation, now may be the right time to get approved to purchase a home. If you lock in a rate, you are in good shape to afford more for a home. With an approval letter in your hand, you look more solid to sellers who may accept your offer, knowing you are qualified to afford their home.
However, with a lack of inventory, you may not find the exact home of your dreams, and you may want to wait for more of the spring market to appear. On the other hand, you may be competing with a lot more buyers; investors and second-home buyers may have cash to offer, which is very appealing to a seller.
Contact a Professional Real Estate Agent in the Tri-Valley Area to Help You Make an Informed Decision
If you are on the fence about buying or selling a home, it’s wise to contact a professional Realtor® who can help you make a more informed decision.
The Gamache team has decades of family experience helping buyers and sellers in the Tri-Valley area. We live here, raise our family here, play, volunteer, and work here. We are invested in the area, and we would be honored to be your Realtor® of choice.
If you would like more information on our services or how we can help you make a real estate decision that is right for your needs and not ours, please contact us (925) 918-0332 or firstname.lastname@example.org.