Selling a House? Don’t Overprice It
Hello fellow Realtors, Lenders and other friends;
There was a really good article released by The KCM Blog on July 15th that goes right along with our message in today’s video: how to increase a Buyer’s capability to purchase your particular listing, in today’s market.
We have included the full article along with an original link to it, below. Do make sure to read all the way through. Smart facts and strategies to keeping more Buyers and Sellers in the game, right now!
Best, Forest & Lynn
Owners/Broker–The Guy in the White Hat & Realtor–Flipper Chick
Sun Pacific Mortgage & Real Estate
Family owned and operated in Sonoma County since 1988. Your Hard Money Lender!
The KCM Blog – Selling a House? Don’t Overprice It
There is no doubt that the housing market is coming back nicely. What, if anything, could slow down the current momentum? We believe it may be sellers’ over exuberance when it comes to pricing. There is little doubt that house prices have appreciated over the last twelve months in most regions of the country. However, with both the inventory of homes for sale and interest rates increasing, we have to be careful to not over judge what the market can bare.
Trulia just reported that asking prices have jumped dramatically and the increase is accelerating:
- Year-Over-Year prices jumped 10.7%
- Quarter-Over-Quarter prices jumped 4.1% (16.4% annualized)
- Month-Over-Month prices jumped 1.5% (18% annualized)
No expert is expecting home prices to shoot up 18% in the next twelve months. If anything, price appreciation may slow as rates and inventories increase. Investors will begin to slow their purchases and the first-time buyers expected to take their place will be working within a pre-set budget in many cases.
Buyers’ Purchasing Power
Let’s look at an example: A young couple is looking for a home and have predetermined that their budget will only allow them to spend $1,000 a month on a mortgage. At today’s mortgage rate of 4.5%, they could afford a $200,000 mortgage ($1,013 principal & interest). However, if rates jump to 5%, they would have to lower their mortgage amount to $190,000 in order to keep their monthly payment where they need it ($1,020). At 5.5%, the mortgage would need to be no more than $180,000 ($1,022).
The Impact on Prices
This decrease in buyers’ purchasing power will have an impact on home values going forward. We do not believe it will cause a decrease in prices. However, we do believe it will likely cause current rates of appreciation to slow.
If you are thinking about selling your home, don’t get carried away with current headlines about home price increases that have taken place over the last twelve months. Instead, call a local real estate professional. They will be best prepared to explain where prices are headed over the next six months.
Selling a House? Don’t Overprice It – Posted: 15 Jul 2013 04:00 AM PDT