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Why Are Houses Selling So Quick?

The market has experienced a recent surge in interest, with some first-time homebuyers and second-home buyers jumping in. These buyers put considerable pressure on prices, boosting the market for the homes they wish to buy. Similarly, many people are refinancing their mortgages, a relatively easy process compared to buying a new home. So can you sell your home fast in Baltimore, MD, today? Rising mortgage rates are one of the most common causes of the recent spike in demand, but rising interest rates also contribute to the market’s rapid expansion. Read on to learn more.

Rising mortgage rates

The housing market is currently competitive for homebuyers, with many homes selling within one week. As mortgage rates have risen, homes are not experiencing a significant price decline. The lack of supply is a major contributor to the high prices. However, the lack of inventory may not necessarily be a contributing factor. The market may have reached a state of equilibrium when demand and supply are balanced.

One reason for this slowdown in the housing market may be the rising mortgage rates. The average 30-year fixed-rate mortgage hit 5.1% last week. In August 2021, the rate will be three percent. The rising interest rates have created a more stressful environment for homebuyers. Earlier this year, 30-year fixed mortgage rates were under seven percent, but by December 1994, they had spiked to 9.11 percent. That is a two-point jump in less than a year. If the current trend continues, the rise in 2022 could be even more dramatic.

Until recently, the housing market has remained relatively stable. A sharp rise in mortgage rates would have led to a significant drop in demand and falling prices. It would have had a negative impact on the economy as fewer people would have been able to afford to purchase a home. Also, existing homeowners would have felt less secure and curbed their spending in response to the higher mortgage rates. However, economists are confident that the housing market will continue to rise, even double-digits are predicted shortly.

Pent-up demand

This phenomenon is caused by an unusual surge in demand that usually fades as the market catches up to supply. This phenomenon is most common in durable goods like cars and furniture. In addition, consumers often defer new purchases during hard times and opt to make existing items last longer. These factors can include fears of future unemployment and limited access to credit. As a result, pent-up demand rises in the market after low activity.

In the first few months of a recession, pent-up demand is greatest. Because of this, lenders are offering cheaper mortgages to entice people to buy their property. Consequently, more competition means more money for the home. When more buyers are competing for the property, the odds of a quick sale increase. Moreover, homes that are difficult to sell have a higher chance of selling in a seller’s market.

While inventories of existing homes are historically low, housing demand has remained high. It has been attributed to pent-up demand created by the COVID-19 pandemic, which pushed many Americans to buy suburban homes, which are less crowded than urban apartments. In addition, shortages of labor, land, and materials have made new home construction difficult. Pent-up demand has also caused real estate sales to spike.

FSBO option

The FSBO option may be a great fit for certain sellers. However, it would help if you were realistic about the amount of work involved in marketing your home. FSBO sellers are usually not real estate professionals, so they will likely price their homes well below market value. Therefore, choosing a realistic starting point when negotiating a purchase price is important. Fortunately, a few simple steps can make this process much easier.

Aside from possible savings of thousands of dollars, the FSBO option also requires equal work. It would help if you took the time to show your home to prospective buyers, not every buyer is comfortable with strangers. Selling your home is a full-time job! It is hard to fit everything into your schedule and market your home. You have to make time to show your home to prospective buyers and handle the paperwork.

One of the most common ways to increase the sale price of your home is by offering seller concessions. While the most common concessions vary from market to market, knowing which ones work in your area can help you bolster your offer. For example, a Clever survey found that sellers in New York often cover 1.30% to 2.10% of buyers’ closing costs, which is approximately $5,110 to $8,254 on median home values.