When is the right time to buy or sell a house? | Immovable

Over the past two years, the housing market has seen many fluctuations, which can make current and potential homeowners wonder if now is a good time to buy or sell a home.

Experts Joel Gabelman, Realtor for Gabelman Group in Bainbridge Township, and Jenn Wrubel, Realtor for Re/Max Haven Realty in Solon, discussed the housing market and the pros and cons of buying and selling right now.

In order to determine if it is a buyer’s market or a seller’s market, real estate agents take all active homes on the market in an area and divide that by the number of homes sold in the past year. over a period of time, Gabelman explained. If the result is less than six, it is a seller’s market. If it’s above six, it’s a buyer’s market.

“Let’s say there are 60 active homes and 10 homes sold last month,” he said. “If you assume there are no more houses online – no new active houses – you will sell all available houses in six months.”

This is considered a neutral market, Gabelman said. It favors neither the buyer nor the seller.

With a larger inventory, and if there are more homes than there are buyers, a person may get better deals, he noted.

With low inventory, the cost of construction is higher, he said.

Because the COVID-19 pandemic has impacted the supply chain due to the lack of international shipping of goods, material prices have increased, leading to higher construction costs, Gabelman explained. .

“With low inventory (and) high cost to build, homes would sometimes sell within a day – $30,000, $40, $50,000 more than demand, waiving inspections,” he said. declared. “It was crazy. It was such a seller’s market. You could (put a house up for sale) and you’d have 10 people the first day on the market.

A few months ago, Gabelman saw a change, he said. Interest rates have gone up and buyers are tired of having to fork out so much, forgo inspections or anything else they do aggressively to get a home.

“Currently we (see) a significant imbalance between housing supply and demand,” Wrubel said. “Although the delta is still large, it was huge just a few months ago.”

Another factor is funding. Interest rates impact how much of a loan a customer can afford, she said.

“As interest rates go up, pre-approved mortgage amounts go down,” Wrubel explained.

Although interest rates are rebounding from “incredible” lows, they are still quite low compared to historical rates for the past 30 years, she noted.

Whether it’s a buyer’s market or a seller’s market also depends on the needs of the customer, she explained. Some buyers have no choice, some are looking to upsize or downsize, and some are looking for a change.

When looking for a real estate agent to help with a home purchase, Wrubel recommended finding one that has knowledge of the area, a proven track record, and will think outside the box to get the offer. of a buyer stands out in a way that suits them.

“Open and honest dialogue is imperative,” she said. “The personalities also have to fit together.”

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