Yes, the economy is in the midst of a bit of a crisis, and for obvious reasons. There is, however, one bright spot and that is the housing market.
Traffic on a large real estate company’s website “… is up about 40 percent, and the National Association of Realtors announced that pending home sales are up 15 percent from last month,” according to NPR.
In Truckee-Tahoe in particular, the remote nature of second home real estate typically creates a rhythm to sales that is slightly less frantic than in primary home markets. The urgency of this moment has created a new normal wherein properties are often selling above asking price within days of coming to market. Prices are now within 1% of asking on average and as much as 25% above in certain cases.
If you’ve toyed with the idea of selling your Tahoe home, now is the perfect time. Read on to learn why you should not let this opportunity pass you by.
Demand for Tahoe real estate at an all-time high
July 2020 represented the highest number of residential transactions as well as dollar volume ever recorded. Over 300 residential closings beat the same month in 2019 by more than double and the previous month by over 35%. Previously, the most prolific month for real estate transactions was August 2017 when 213 properties changed hands. Similarly, the total dollar volume in July was over $333,000,000; the first time $300 million has ever traded in a single month.
Home equity at record highs
Do you have any idea how much equity you have in your home? Many homeowners haven’t a clue, but it’s worth finding out.
Mortgage data firm Black Knight found that “Americans’ home equity reached a record high earlier this year, according to Jeff Ostrowski, senior mortgage reporter for Bankrate.com.
With mortgage rates so low (see below) and your hefty equity, that dream home may just become a reality.
Mortgage rates are oh, so low and may go lower
Mortgage rates are mercurial and almost impossible to predict. However, “… many experts foresee rates falling below 3 percent in the next six months to a year,” Ostrowski claims.
He goes on to say that while the current low rates may not compel you to sell your home to buy another, “… a 2.75 percent rate probably would.”
If you’re waiting for a specific mortgage interest rate to occur, let me know. I work directly with a local mortgage broker on a daily basis and can keep an eye on rates for you and let you know if and when it happens.
*As for August 21st, the average 30 year fixed rate mortgage is 3.044% with several lenders already below the 3.0% mark.
Home prices are amazing for sellers
Those low mortgage rates are encouraging homebuyers to jump into the market. That, in turn, increases demand and, subsequently, home prices.
The multitude of buyers outnumbering sellers is predictably driving prices upward at an astronomical rate. In July, the average residential sale price was $1,170,000; 43% higher than the same metric in 2019. Accordingly, median price rose to $765,000; a 22% increase from the prior year’s figure.
Homes are flying off the market
The influx of buyers has driven inventory to historic lows. Just 387 residential properties are currently listed representing barely 1.5 month supply – Tahoe Truckee typically sits at a 3 month supply. With local residency at an all-time high, willing sellers are few and far between indicating that the supply shortage is likely to continue through summer.
The real estate market has always been a moving target and that hasn’t changed. One day mortgage rates are down, the next day they rise. Likewise, nobody can predict the duration of what is currently an amazing seller’s market.
The time to sell your Tahoe home, if you been considering doing so, is right now.