Home prices are continuing to rise as we progress into fall, and this is great news for sellers who are looking to maximize their homes potential. The current average appreciation rate is 14.5%, a stark difference from 4% in 2019. Not only will appreciation impact how much equity you have in the property, but it will also influence your future home sale and, more importantly, how much you stand to make from it.
What Impacts Appreciation?
How fast and how much real estate appreciates depends on many different factors. Here are some of the most important factors that influence a property’s appreciation: market conditions, improvements, locations, and interest rate trends. The overall economy plays into property appreciation, too! When the economy is weak and consumers are struggling, real estate tends to be less in demand (because many people can’t afford it or they may not be able to qualify for financing). When the economy is strong and employment is up, though, you often see appreciation rates start to rise.
If you are questioning whether to sell your home now or later, you may be also wondering how long will this price appreciation last? Let’s take a closer look at what leaders in the industry are predicting about appreciation!
Lawrence Yun, Chief Economist, National Association of Realtors (NAR):
“At a broad level, home prices are in no danger of a decline due to tight inventory conditions, but I do expect prices to appreciate at a slower pace by the end of the year.”
Selma Hepp, Deputy Chief Economist, CoreLogic:
“The imbalance between robust demand and dismal availability of for-sale homes has led to a continual bidding over asking prices, which reached record levels in recent months . . . . Nevertheless, with more new listings and new home construction, home price acceleration that has built momentum, and continues to reach new highs, will likely slow later this summer but remain in double digits.”
George Ratiu, Chief Economist, realtor.com:
“Many sellers are going to take advantage of higher prices. This summer is going to signal the move to the next chapter, and this will very much be the year they’re going to put their home on the market.”
What Does This Mean For You as a Seller?
As a property appreciates and gains value, you will enjoy a few benefits. First, you can make more off selling the property. As long as demand is strong in your market, you should command a higher sales price and thus take home more in profits. Also, you will have the opportunity to enjoy more equity. You can access this through a cash-out refinance, home equity loan, or home equity line of credit and use the funds to improve your property (meaning even more appreciation) or to put toward the down payment on a new investment.
Experts agree that as the summer months come to a close, this is giving sellers a great opportunity to capitalize on today’s rising home prices. The rise in prices are forecasted to moderately increase over the next few years, but will not decrease. If you choose to sell now, your house could set you up for huge financial success today.
If you are thinking about selling your home, listen to the experts! If you are interested in making a move in the market, let’s connect to discuss the process! Selling your home sooner rather than later will allow you to take advantage of today’s home price appreciation!