Over the past year, the real estate market saw trends that are unusual under normal circumstances. As a result of the ongoing health crisis, home prices have reached historic levels. Following months under lockdown, homeowners and buyers saw an unprecedented surge in transactions.
This comes as record-low interest rates are causing a surge in demand amid a market that’s low on new listings. In effect, these conditions have caused historic increases in median home prices. In June of this year, home prices rose 17.2% nationwide.
Today’s real estate market provides benefits for everyone, including buyers, sellers, and investors. How do you make the most of today’s real estate situation? Here are a few key takeaways you might want to keep in mind:
Rethink your current homeownership needs
Things have changed significantly for homeowners since last year. Having spent months indoors, families have thought about their evolving needs. Parents who have been working from home will find the need to move up to a larger one that’s ideal for remote work. Some may even consider adding recreational areas, study rooms for children, and fitness spaces.
If you have thought about the same things, you might as well take your evolving needs into account in today’s real estate market. Depending on these needs, you may want to move into a quieter neighborhood, a larger home, or a tax-friendly city or state. In any case, now would be the best time to accomplish your real estate goals.
Leverage your equity gains
Rising home values have added wealth to today’s homeowners. According to analytics firm CoreLogic, homeowners have gained over $2.9 trillion in collective equity for the second quarter of this year alone. This translates to at least $51,500 in equity gains per household. If you have owned your home for more than 10 years now, you have enough equity to finance your next move in 2022.
If you are planning to move out next year, you can sell your home and leverage your equity to purchase a bigger home or downsize to a smaller one. If moving out isn’t part of your plan yet, you can use your equity to refinance your mortgage. This allows you to reduce your monthly mortgage payments in the long run. In addition, you can also use your home equity to finance your children’s education, build a small business, or tap into investment opportunities.
Get more exposure for your home
Are you planning to sell your home this winter season? Under normal circumstances, buying activity fizzles out when December arrives. Today’s market is different. Considering that there is still a low supply of available listings, the high demand for homes remains high. Many people are expecting to purchase a home before mortgage rates rise and buyers are even more motivated to close in on their dream homes.
It will take months before new listings come through and put an end to today’s sellers’ market. This would be beneficial to you since it means more exposure for your home. Considering that there are more motivated buyers now, you can bypass the need to hire a real estate professional and sell privately. You still need to get your house ready for selling if you want to get a good price for your home.
Purchase before interest rates increase
Although today’s market is more advantageous to homeowners, this shouldn’t keep you away from purchasing a new home. Bidding wars are still happening in many major metros, but buyers like yourself can navigate today’s market challenges and get a good deal before anticipated interest rate increases occur.
If you are looking to buy in this market, make sure that you have enough equity in your current home. In case you are buying for the first time, make sure you get pre-approved for a mortgage you can afford over the long run. You should also pay close attention to your homeownership budget and the property tax rate in the neighborhood you will want to move into. While experts say it’s a tough time for buyers right now, it’s still a good time to achieve homeownership.
Today’s real estate market is one for the books. Numerous opportunities are available, so you might as well make the most of it while they are there for the taking.