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Recently, a client came to me asking about current market conditions in the Grand Rapids area, so today I thought I would give you a quick rundown of trends we’ve seen in recent months.
The real estate market is in full swing right now; it’s the time of year when most people who have been thinking about making a move actually jump into the market. However, unlike most years, we currently have low levels of inventory. In 2008, for instance, inventory was at 13.3 months. Since that time we’ve seen a steady decline to reach our current levels, which sit at about 2.5 months. Why is this?
- There are still sellers with low equity: Believe it or not, there are still some sellers out there who are not quite where they need to be with equity. I recently saw a stat that said around 19% of sellers are still in the low equity or no equity status.
- Many potential sellers refinanced after the bust: Because many people refinanced after the market crash, they now plan to stay put for a bit longer. About 16% of all potential sellers are those who refinanced with very low interest rates.
- A lot of people purchased within the last 7 years: About 14% of potential sellers purchased a home within 7 years, so we probably won’t see them putting their homes on the market anytime soon.
These three groups add up to about half of all potential sellers, and none of them will sell in the next year. Additionally, there are some potential sellers who don’t understand how much their homes are currently worth! Some sellers have watched the market decline for years, but haven’t yet realized that we have made a substantial recovery. There’s also another group of sellers who were shocked by the crash and simply don’t want to take the risk of another decline in home values. In a sense, the past trauma of lost equity is stronger than their desire to own a home again.
The thing everyone needs to realize is that now is an ideal time to sell. There are hungry buyers out there desperate for a new home. With inventory as low as it is, it is likely that you’ll receive multiple offers and sell for top dollar! There’s no reason to sit this one out!
If you have any questions about current market conditions, or if you need real estate assistance of any kind, don’t hesitate to reach out to us! We would love to hear from you!