You Might Not See Another Seller's Market As Good As What We Have Now!
It's true. While we have been in a seller's market for years...this year Arizona homeowners can cash in BIG on gained equity. Arizona has seen almost a 30% increase in equity in just one year. Typically you'll only see equity rise 3-4% each year.
"But selling high means buying high!"
Yes and no...
Selling high gives you equity that you can pocket immediately, while getting a new low interest rate on another property and using that equity however you want. Same idea as taking out a second mortgage - but if you need a different living situation then moving is still a smart move in this market.
It might be even smarter to put down the equity on a large down payment so you can get rid of PMI.
Prices are indeed high, but affordability is even higher. Affordability is what we look at when considering smart market moves. It still makes sense to buy property at these high prices because the interest rate is so low, making overall affordability even better than during the '06 housing bubble which was followed by a collapse.
"So is this a sign of another housing bubble?"
Absolutely not. This isn't a bubble. Too many homeowners have equity so there will not be a large increase in foreclosures. There's also too many buyers who can afford housing even at these prices. The spike in home values is because there hasn't been enough supply to feed the demand. New homebuilders are backed up by a few years. They can't build fast enough. Until new home builds catch up to the supply - the demand for homes will remain strong and purchasers will have to pay to get what they want. This bodes well for sellers, but the affordability for buyers means it's still ok to buy in this market.
Experts also predict that home prices still have room to grow so even if you sell and buy now you may have more equity in the new property in just another year or two!
If you have any topics or questions you would like answered, contact The Shanna Day Dream Home Team - we’ll find the answers for you!
Shanna Day Dream Home Team
Keller Williams Realty East Valley