If you’re considering selling your home in the next few years, now might be the best opportunity you’re going to see anytime soon. Thanks to a culmination of several factors Alabama’s Gulf Coast is seeing one of the strongest seller’s markets our area has ever seen.
What does that mean for you as a potential seller? It puts you in control of negotiations.
While there are several reasons why now is an excellent time to sell your home, below are three of the main reasons you may want to go ahead and make your next move, even if it’s sooner than expected.
1. Low supply and high demand have caused an increase in home prices.
The combination of delayed sales due to COVID-19 and a rise in the average amount of time between moves — by three years since 2008 — has culminated into a strong local seller’s market, meaning demand for homes is much higher than supply. As more people want to purchase homes than there are homes available for sale, the Gulf Coast has experienced a corresponding rise in home prices.
While prices did drop from the month prior in February 2020 in Baldwin County, the average sales price has since risen by nearly $20,000 compared to July 2019. Same is true in Mobile County. Following a drop from the previous month in February 2020, the average sales price has risen by $15,000 from July 2019, according to stats from the Alabama Center for Real Estate.
If you’ve considered the possibility of selling your home – perhaps the quarantine showed you the need for a few more rooms — the market is moving quickly, and now’s your chance to cash in on the advantages.
2. Interest rates are at historic lows.
Freddie Mac reports the average rate for a 30-year fixed-rate mortgage in July 2020 was 3.02%, the lowest rate in nearly 50 years. This means if someone purchased a home in July 2019 for $300,000, assuming a 20 percent down payment and 30-year 3.77% fixed-rate mortgage, they could now purchase a $330,000 home for the same monthly price, assuming the same down payment and loan term. Buyers can now afford more home for their money, and sellers benefit from an increase in people wanting to move while rates are low.
3. Homes are selling quickly.
Data for Baldwin County shows only 2.2 months of available inventory based on the number of homes that sold in July 2020 versus 5.1 months of inventory in April 2020, and Mobile estimates only 1.2 months of available inventory in July compared to 2.1 in April 2020. That estimate, known as the absorption rate, is calculated by dividing the number of homes sold in a month (or any period of time) by the total number of homes that were available for sale. It’s one of the ways real estate professionals gauge how quickly a home is likely to sell, and as you can see, the answer right now is fairly quickly. This alleviates one of sellers’ most common fears: their home sitting on the market.
Of course, potential sellers must weigh the benefits of this historic seller’s market with the possibility of needing to find a home quickly themselves if their property sells. Considerations, like whether you’d be moving to another area that might have more inventory available, are important to discuss with a REALTOR®, who can advise you on all the options you have available. In some cases, you may be able to negotiate staying in your home an extra few months. You may also want to consider a move-in-ready new construction home. Contact a Bellator agent to discuss your options!