Most people don’t buy their “forever house” right out of the gate. It’s hard to afford a home that has the size and amenities you want on your first (or even second) purchase. So most people start out with something a little smaller, needing some work, or not in their ideal location. The plan is usually to spend a few years in it, then sell it to buy a bigger, better home in your ideal neighborhood once you’ve built up some equity.
That typical trajectory has been put on pause for a lot of homeowners over the past few years because there just hasn’t been enough “move-up” homes to choose from. No matter what the market is like, it’s not uncommon for sellers to be concerned about finding the exact home they want to buy. So the low inventory of houses, and the fierce competition over the past few years, has actually compounded those two problems by causing so many potential move-up buyers to not even put their house on the market.
But if you’ve been waiting to sell your house and buy a move-up home, the time may finally be right! Here are four reasons that, when combined, create a strong argument for selling and buying a move-up home right now:
- Increasing inventory.
- Lots of equity built up.
- Still not too much seller competition…
- …and still able to call the shots with buyers.
First and foremost, you should have more move-up homes to choose from. According to data in this realtor.com article, the number of existing homes for sale is up 15%, and new construction is up 5%.
Do keep in mind that those are nationally based statistics, so those percentages may be lower or higher in your particular area. But overall, the trend is showing that you should have more options than you’ve had in quite a while.
According to this REALTOR Magazine article, the average homeowner has gained $240,000 in equity in just the past 10 years! Even people who’ve only been in their house for the past 5 years are averaging around $155,000 in equity gains. So while you may have felt stuck in your home and unable to move up for the past few years, that time has been profitable for you.
While inventory is increasing as mentioned above, the market isn’t flooded with listings for you to compete with at this point. But the general sense is that the number of houses for sale, and the time it takes to sell a house, will increase more in the not-too-distant future. So listing your house soon can help you capitalize on less competition and increase your odds of selling for as much money as possible and in the quickest amount of time.
Ideally, sellers love to find a buyer who will not only give them the price they want, but also favorable terms, like a longer or flexible closing date so they have time to search for a move-up home. Those aren’t the easiest terms to get if the market shifts more (or even drastically) in favor of buyers. So if there was ever a good time to look for a new house, it’s now.
The Takeaway:
The past few years haven’t been the best market conditions for selling your house in order to buy a move-up home. But with increases in inventory and equity, and yet still less competition than there may soon be, now may be the perfect time. Of course, make sure to speak with a local real estate agent you trust (ahem!) to help you assess your particular situation. This way you can make an educated decision based upon your equity, local listing inventory, and buyer competition.
