Spring is the optimum time to sell a home. Historically, regardless of whether it's a buyer's market or a seller's market, inventory almost always rises in the spring. Why? Because the largest number of buyers are actively searching for a new home during the months of April, May and June.
The good news for Mobile is that the inventory shrinking. This means that due to this lack of inventory the homes are appreciating in value. According to USA Center for Real Estate and Economic Development, the year to date inventory numbers on existing homes is down 18.3 percent.
According to the Mobile Area Association of Realtors, sellers are getting 97 percent of the list price with an average of 99 days on the market. With numbers like this, the time is NOW for getting top dollar. What is selling and for what price? The median sales price for Mobile for March is $136,950, meaning if all sales are lined up in a list ordered from lowest to highest that $136,950 is the middle price point. The breakdown is as follows: 137 homes sold for $99,999 or less, 118 homes sold for between $100,000 to $150,000, 79 homes sold for between $150,001 to $200,000, and 120 homes sold for $200,001 or greater.
On the flip side of the coin, interest rates are historically low right now. Rates are down more than a quarter of a percentage point from last month. Experts are saying that rates are poised to move higher soon. That means that the time is NOW to shop for a mortgage.
Homebuyers who qualified for conventional loans had an average FICO credit score of 763 in 2012, according to Ellie Mae. By 2015, that had fallen to 754, where it remained for all last year. In February 2017, it moved to 752. The average FICO score for FHA homebuyers fell from 718 at the end of 2012 to 686 at the end of 2016. These are exactly the kinds of trends that help borrowers land the loans they need.
This availability of loans translates into affordability of homeownership verses renting. According to the National Association of Realtors, it is 37 percent cheaper to purchase a home today than to rent. When a mortgage payment, property taxes and insurance total up to be cheaper than a monthly rental payment, it just makes sense to buy a house. The past couple of years have been a period of slower economic growth and real estate has proven to be a solid investment.
What does this all mean? It means that sellers are getting almost list price relatively quickly. It means that buyers can get loans and buy houses cheaper than they can rent. Is it the “perfect storm” for Mobile real estate? It could be. Call Cain Real Estate and let us help you navigate your course.