Temecula homeowners that have wanted to sell, but felt trapped by low housing values, may find this to be an ideal time to sell. The recent performance of the Case-Schiller Index demonstrates the new-found strength in real estate values. Mortgage interest rates, which have been at historic lows, are increasing to a degree (but not enough to deter buyers). If you’ve been on the fence about selling your home, consider these points:
The Case-Schiller Index Shows Promise
One of the most watched measures of single family home values has been Standard & Poor’s Case-Schiller Index. This index has measured the performance of the residential real estate market since 2000. It follows price trends in the top twenty metropolitan areas of the country. In March of 2013 alone, the overall nationwide index jumped 2.5 percent. This was the largest single month increase since the inception of the Case-Schiller Index. This one month increase was perhaps even more impressive because it occurred before the full arrival of the traditionally more active spring-summer selling season.
Moreover, the year-over-year increase has also been substantial. In April, 2013, prices were a dramatic 12.1-percent higher than they were the previous April.
Mortgage Rates Still Low
One of the reasons why homeowners are seeing better home sale prices has certainly come from the historically low mortgage interest rates. As buyers found 30-year mortgage rates in the “threes,” they were definitely willing to pay more for properties that they really wanted. Now that those rates have crept up into the “fours,” the purchasing power of buyers in Temecula has eroded a bit. For example, as rates increased from 3.3-percent to 4.0-percent, an average buyer lost $12,000 worth of purchasing power. Buyers are looking to find a home now, before rates get too much for them.
Sellers that choose to wait even longer at this point may be disappointed. There is little belief that mortgage rates will return to even the current low levels anytime in the next generation. Therefore, for sellers wishing to take advantage of this much stronger real estate market, the time to sell may be now. Now is the opportunity to possibly make a good profit on one’s existing home in Temecula.
Homes Selling At A Brisk Clip
Home values have probably also benefited from pent-up demand. For several years (since 2008’s real estate collapse) many lenders were hesitant about doing traditional mortgage loans because of newly attached restraints. Now, a solidifying market is moving the typical lender to make lending standards a little more reasonable. Now, home buyers are appearing in large numbers.
For example, in May of 2013, homes sold at an annualized rate of $476,000. This represented an increase of 2.1-percent compared to April. The year-over-year increase was a dramatic 29-percent.
However, this surge could suggest that the many buyers that couldn’t get loans until recently are now making purchases. The available group of buyers that represented the pent-up demand for Temecula homes may start to shrink. That in turn could soften the market again in the not-so-distant future. In fact, in June of 2013, the National Association of Realtors stated that “home price growth is too fast.”
Selling? Now Is The Time
The advantageous combination of pent-up demand, low interest rates, and prices that are still attractive to buyers may not be sustainable. Therefore, now is an ideal time for sellers to get into the market and to move their properties while conditions remain so advantageous.
Thus far, interest rates have not increased to the point that buyers will be too reluctant to pay somewhat higher prices for single family homes around Temecula. Also, the supply of potential buyers may still be adequate. However, either higher interest rates or fewer available buyers could soften the market rather quickly. Therefore, the time for sellers to get the prices they’ve wanted may be right now, and not tomorrow.
For More Information
To learn more about selling your home and to get started the right way, read our article: