Although The Katie McNeill Team has been very fortunate in Northeast Ohio and Lake County, here is an article describing the state of Real Estate in the Country. To get the best price for a home, it’s important to know when to sell or buy based on current housing price fluctuations. For sellers, when to sell to get top dollar for your home will play a factor in the listing price.
Economic and political conditions out of your control can affect the expected price. Other factors impacting you as a seller are interest rates and market supply and demand.
Housing Supply and Demand
Supply and demand affect every industry, and these economic laws apply to the housing market. If more people want to buy homes than available homes, the housing demand goes up as the supply decreases.
This makes houses more expensive and more difficult to purchase. If banks lend less money for a mortgage, housing prices go down.
As unemployment decreases, housing prices tend to increase. With a strong economy, people feel secure, have jobs, and are confident about going into debt with a mortgage. Approval for a mortgage is also more likely.
If the economy is weak, people get laid off, must take lower-paying jobs, or go on unemployment compensation. If fewer people can take out a home loan and buy a house, then the competition decreases. If a seller is motivated, they will have to lower their asking price to sell.
Home prices have a tendency to be higher when interest rates are low. Competition for available homes on the market increases when interest rates are low because there are more buyers. The purchase of a more expensive home is also possible with lower interest rates and lower mortgage rates. When interest rates increase, so does your monthly mortgage loan payment.
A significant aspect of housing market prices is mortgage rates. With a small downpayment and borrowing for 30-year fixed rate mortgages, monthly expenses can be severely impacted by interest rate changes. Mortgage rates fell in 2018 for about two years, and monthly payments went down while housing prices increased. The pandemic also changed housing demand.
Prices can rise and fall in your area or neighborhood and may not be the same as the current national levels. For example, even if housing prices rise across the nation, the prices in your area may fall due to the desirability of your neighborhood.
Excellent school districts or trendy areas are examples where prices would be likely to rise. Another factor is when a large company brings many new jobs to an area, houses have higher prices. Your home’s value could increase because people want to be in your neighborhood.
Tariffs are placed on the materials needed to build new homes that are imported from other countries, which impacts the supply chain and housing prices. They are primarily affected by national and local politics. For example, if high tariffs are applied to foreign lumber or steel, the costs of new home building increase. Housing prices are also impacted by tax laws.
Real Estate Market
According to Money Crashers, the Cleveland area is ranked as the number one best area in America to buy a home and home sales. They compare local prices to national and regional averages and the likelihood of appreciation of your home. For example, single-family existing homes are very appealing to people who want to work from their home.
Professional real estate investors know how to make money in any market cycle, which is one reason people invest in Cleveland rental property. According to Crain’s Cleveland Business, Cleveland is one of the most recession-resistant markets in the U.S.
Cleveland ranks within the top four markets with the lowest risk of a real estate decrease.
The Katie McNeill team approach is designed to use our combined knowledge, experience and skills to provide the expertise and service our customers and clients deserve.