Generalization of facts do not often fit in Real Estate. If you are looking for the answer to “when is the right time to buy or sell a home?” stop and consider contributing factors in the area you are buying into or selling. Understanding trends will provide you a clearer understanding of how much competition you have to purchase a home or how many potential opportunities you have to sell your home. However, do not develop “paralysis by analysis”.
Trends are a great first step in answering the age-old question of “the best time”. This one of the better ways to forecast the future and minimize the fear of not having a crystal ball at your disposal. Population growth provides you a better understanding of the competition (home-buyers) and potential opportunities (home-sellers). The US Census Bureau is the best resource for unadulterated facts. In the five-county area Grand Traverse Michigan, the population has grown on average by 1,072 each year since 2015. With most of the population looking for affordable housing, the competition to purchase a home or an opportunity to sell a home is very clear.
The affordable housing category in the five-county area is $150,000 - $199,999. And the affordable housing market is the largest market section. Collectively, affordable housing sector accounts for nearly 18% of the housing market in this area. And 83% of the population are homeowners. If you are a potential home buyer and your competition – new families moving into the area – increases over a 1,000 people, on average, each year, difficulties of finding a home will be much harder – especially if the availability of homes do not substantially improve.
New inventory of homes, also known as (AKA) new construction, has seen a very small increase, over the last 3-years - less than a quarter of a percent (.22%). The current level of existing affordable homes is approximately 3,593 homes. At the current average rate of growth, only 8-homes each year come on the market in the affordable housing market within the five-county area. Although interest rate hikes will slow the buyer’s purchasing power, the need for affordable housing and the population growth is a strong indicator for a steady seller’s market in the foreseeable future.
To answer the question – “When is the best time to buy or sell a home?” – the right time is now. The five-county area will continue to see growth, the new home construction is not showing any signs of significant increase of affordable home construction and interest rate hikes will ultimately decrease the current appreciation rate of a home due to lack of buyers’ purchasing power.
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