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Should you sell your home in a high interest rate market?
6 Reasons You Should Consider Selling Your Home in this High-Interest-Rate Market
Selling your home while the interest rate is high might seem counterintuitive at first, but there are several advantages that can actually be a strategic decision with great results!
Here’s some reasoning behind why selling your home in a high-interest-rate environment could be a good idea for you:
1. Attractive to Serious Buyers:
When interest rates are high, it often means that only serious and qualified buyers are in the market. These buyers are actively looking to make a purchase despite the higher borrowing costs. This can lead to fewer, more meaningful showings (that means less hassle for you!) that are more likely to result in an offer. These buyers are motivated, committed, and not likely to let a deal fall through.
2. Limited Housing Supply:
High interest rates tend to decrease new listings hitting the market, straining the supply of homes for sale. We have seen this over the past 12 to 18 months, with nearly 23% fewer homes for sale in Petaluma today (August 2023) compared to an already sparse market last year. This gives your home a chance to stand out and claim the spotlight in the market. With less competition from other sellers, your property’s appeal could be heightened.
3. Potential for Competitive Offers:
In a high-interest-rate environment, some buyers might feel a sense of urgency to purchase before rates climb even higher (we’ve heard Magic 8-Ball predictions that they may hit 8% by the end of the year!). This urgency can drive them to make competitive offers and finally get out of the home buying game before things get even crazier. Additionally, buyers may be willing to pay a premium for a well-maintained and attractive property that they believe will retain its value in a tumultuous market and rate increases.
4. Capitalize on Equity:
Being a home seller in a high-interest market likely means you’re also thinking about being a home buyer. While taking on a 7% mortgage may seem like a nightmare, there’s a chance you can utilize your home’s equity to purchase a property outright, taking advantage of waning prices and bypassing the hefty interest rate all together. Or wait it out as a renter while paying off your debts and making sound investments!
5. Flexibility in Negotiations:
In a market with fewer buyers, you might have more negotiating power as a seller, not just in terms of price but for concessions and terms as well. Buyers could be more willing to compromise on certain things such as repairs or closing costs and rent-back periods in order to secure a property they’re interested in.
6. Market Timing and Personal Goals:
Selling a home is not only about financial factors but also about personal circumstances and goals. If your personal situation aligns with the timing of a high-interest-rate market, it might make sense to capitalize on the opportunity rather than waiting for rates to potentially drop. Rates offer no guarantee to not keep rising or to drop anytime soon, so timing the market could have you sitting on the sidelines for much longer than you anticipated or wanted to.
Contact Jeremy & Peg King to Navigate this High-Interest-Rate Market
Remember, the decision to sell your home is a complex one that should take into account your individual financial situation, local market conditions, and long-term goals. Consulting with a real estate professional, such as the Jeremy & Peg King team can provide you with personalized advice based on your specific circumstances. No matter how the market twists, turns, and flips on its head, we stay in it to provide you the most up-to-date information and accurate analysis for your real estate needs and questions. Ready to see how much your home is worth today? Just ask!