As with anything in life, things change. Previously there was a surge in local rental properties due to a larger amount of people who wanted, or needed, to rent. A large majority of these people are now moving on in their lives and starting to look at homes. This may also be affected by the move for people to work and study from home. More people at home means that there may be more space needed to devote to this workspace.
Currently, with lower interest rates there is an increase in people looking to purchase with the understanding that the time has come in which they can afford to buy a home. There is also a trend of people who are leaving higher-tax areas of the country for areas that are better suited for their needs. They are looking to purchase homes that they otherwise couldn’t afford because of changes to tax rates around the US. It seems like there are fewer and fewer homes going for sale in the country and this means that there is more competition in purchasing a new home. This is also compounded by the fact that there seems to be fewer people who are moving out of “starter” homes and are preferring to stay in place with the uncertainty in the housing market.
While everyone wants to get the most from their home, there is also a risk associated with getting buyers locked into a bidding war over the home. This can drive the offer up higher than the actual value of the home and financing may fall through if the home doesn’t appraise for enough to qualify for funding. This can mean that you’ve lost the buyer that backed out on the property as well as the buyer who’s offer you accepted. Higher purchase price means higher mortgage, higher mortgage insurance, and thus higher payments. If the buyer can’t afford to make all of these payments then they will back out of the sale and you’ll end up losing.
With home prices steadily climbing, then there will come a point where the prices are too high for average home buyers to afford. This means that they will have to come back down. There are a fair amount of people who are currently in forbearance on their homes and when the foreclosure protection expires they may face eviction. This can mean that a lot of properties will all go on the market at the same time causing the market to collapse. You don’t want to be caught trying to sell a home if several other homes in the neighborhood just foreclosed. This will drive the price of your home way down and greatly reduce your chances of getting a price you wanted on the home.
Something you can always consider is instead selling your home to a professional home buyer, like Solid Rock Properties. We understand the current housing market and offer cash for homes. We buy homes for cash all over the Sioux Falls area, so give us a call if you need to sell!