Record Low Inventory
Two years ago this month we wrote about the dwindling supply of homes for sale in Denver. As you can see from the chart below, this trend has continued.
Five reasons homeowners are not selling, and what you should do:
1. “With so little inventory, I’ll be left homeless once I sell my home.”
If you need to make a change, this reason should not deter you. There are a couple of ways around this problem such as making the sale of your home contingent on you finding a suitable home. Leasing your home back from the buyer on flexible terms is another option — this allows you to compete for your next home with cash in your pocket.
2. “I don’t want to give up my low interest rate loan.”
Interest rates are still historically low, but perhaps not as low as they recently were — those days are probably over. If you know that you will make a change in the future, why not take advantage of the low rates while we still have them.
3. “The market is appreciating so quickly, why would I sell?”
If you plan on moving into a less expensive home in the future, it probably makes sense to stay in your current home; however, if you plan on making a move up in price, you would be better off taking advantage of the lower interest rates and lower prices now.
4. “Rental rates are at a historic high. I am going to rent my house.”
We can’t argue with that. We are big fans of real estate as an investment.
5. “I am still underwater on my mortgage.”
Thankfully this scenario is becoming less and less likely. In some cases unfortunately it may still be a reality. If you are able to take the loss and still purchase a home, you may find the switching from a property with a stunted appreciation rate to a home with a better return makes more sense in the long run. This probably rings true for anyone who ever chose a bad stock purchase, and passed by strong returning stocks in hopes of breaking even on the bad stock decision first.
If you are considering moving up, now is a great time to make a move. Interest rates are still very low, and prices for the foreseeable future are only going up. You will end up paying more and getting less if you wait. If you are considering moving down then staying put is probably the right choice.