#1 Low Inventory - Supply vs Demand
Currently we are in something called a seller’s market, which means our inventory or supply of homes currently for sale is very low. To bring things into perspective the number of days supply we had for January of 2015 was 110, 2016 was 90 days, 2017 was 84 days, and 2018 is 64 days! The days of supply is the number of days it would take for every home currently on the market to sell. Meaning that if no one placed their home on the market starting today there would be no more homes for sale in 64 days. There are currently a lot more people wanting to buy homes then there are wanting to selling homes. What this is telling us is the home seller is having the upper hand in negotiations and potentially could have multiple people interested in buying your home.
#2 Equity - Appreciation
Appreciation rates on average have been from 5% to 8% over the last several years valley wide. Making equity a reality for many homeowner’s to use towards their next home, debt, college fund, etc:..
Many of my clients who bought their 1st home 3 to 4 years ago and now are outgrowing that home, with the equity they built they are able to sell and put down a large down payment towards their next home. Which reduces many costs associated with your next mortgage like PMI, Interest Rates, and your Loan to Value. This is allowing people to get into their next home without bringing in any cash out of pocket making it much more affordable.
#3 Interest Rates - Are at an all time low..!
Banks have had a great interest rates over the several months, with having a good credit score you can currently get rates as low as 3.875% for a 30 yr fixed FHA Loan or 4% on a 30 yr fixed conventional loan.
This makes your mortgage payment more affordable compared to just a few years ago or this gives your more buying power for your next home. By dropping both your interest rate and private mortgage insurance you can lowered your payment by a couple hundred dollars a month. As an added bonus, this in turn makes the home your selling more affordable to prospective buyers.