When it comes to real estate, the market can be quite capricious. Sometimes, this means that buyers and sellers have to “strike when the iron is hot” or when things are in their favor. Other times, it means to be patient and wait. With rising interest rates and an increased expedition toward renovations, it is seemingly in the best interests of many property owners to sell sooner than later.
Have you ever heard someone say, “It’s a buyer’s market,” or, “It’s a seller’s market,” in reference to real estate? Clearly, in those scenarios, it means that one party has more power than another in a real estate transaction (or, presumably they do); however, real estate isn’t always a power play. Sometimes, the balance is level and both parties are on equal playing fields. The key is to keep in mind that real estate market changes frequently.
Note to Sellers: Rules of Renovation
Sellers, unless your home is already fairly updated, buyers will expect you to have done some work to your property. Sure, there will be buyers who are willing to buy properties that have not been renovated; however, they are going to be the ones who also expect you to come off of your asking price. So, sellers, if you haven’t updated and your property is still on the market, the lack of modern tweaks may be the reason why.
The thing is –as your realtor will and should have already advised—is that it doesn’t cost much at all to update your property’s appearance. Sometimes, all it takes is a coat of paint. Occasionally, it’s a little more involved (think new floors); however, new floors can be comparative inexpensive and can help you get your asking price.
Think of it in these terms:
- Option 1: List the home for 14 months and pay a mortgage and interest on a 30-year mortgage (so, it’s mostly going toward interest) and finally get a buyer for $10,000 under asking because you are ready to sell.
- Option 2: Splurge on the front end and pour $5,000 into (nice but affordable) new floors and a paint job; sell at asking price after having listed for three months.
While this scenario doesn’t pan out all of the time for sellers, it is much more likely that a seller who has renovated the home will close sooner than a seller who has not.
A Note about Mortgage Rates
While mortgage rates are still blissfully, historically low, they are forecasted to rise in 2015 and March or spring and summer during peak season will most likely be when they start to inch toward a new (higher comfort zone). Of course, while these rates are expected to rise, they will still be comparatively low to what we have seen in the past. Currently, there are no consistent predictions as to what can be expected in terms of mortgage rates.
Given that many sellers will also be buyers, what this means to both parties would be wise to act sooner than later if they are planning on making a real estate transaction within the next year. Sellers who are motivated to sell should list their homes before mortgage rates increase in the hopes that buyers looking to lock into low interest rates will pull the trigger sooner rather than later.
Thus, buyers who plan to buy should start looking if they already are not, and sellers who intend to sell should contact their realtor to evaluate the condition of their property to decide if they should go ahead and list. With summer coming up and mortgage rates likely to increase, it may be advisable to list even if the property does not “feel” ready to list (this is especially true if the seller will also be a buyer).
First-Time Buyer Boom
Though the housing market saw a decrease in property buyers at the end of the 2014 calendar year and at the beginning of 2015, it is expected that there will be an increase in / return in home buying. Specifically, many of these homebuyers will be first-time buyers; they will also be young people.
To those buyers who are starting out, this (spring 2015) is a fantastic time to be looking at real estate on 30A. There are many properties available; while interest rates are still low, earlier in 2015 is a great time to buy if the intent is going to be to buy.
Let your estate agent help you find a property that is in a community that suits your short and long-term needs (in other words, do not invest in a property with the assumption that you can easily sell it in three to five years when life is a little more stable; though, you very well may be able to, it’s not always as easy as it seems).
Because the market can be as turbulent as the crashing ocean waves of the Florida Gulf Coast onto the beaches of 30A, it’s recommended you find a realtor who has expertise in the community you’re buying or selling in. Not only can they keep you abreast of trends like these, they can also keep you advised of other trends that will impact your property value and your investment potential.
There’s no better place to call home than the sparkling emerald strip of Florida Gulf Coast known as 30A. From community to community, 30A is a place locals love to call home. When it comes to 30A, there’s no one more in the know than local real estate expert, Melissa Clements