Property market indicators point towards a period of slowdown in 2017 and eventual sharp decline in 2018. This leaves property sellers with one option to get the highest bid; selling their property in now. Since 2011 when prices of property hit the trough, there has been a 25% jump. Today, S&P/case-Shiller Index Data indicates that the prices sit only 7.6% below the peak that was hit in 2007. Here are the key reasons why you will get more by selling that property now as opposed to 2017.
Housing prices are higher in 2016 and will drop in 2017
Since early 2012 the cost of property has continued to increase and can be equated to the high reported in 2007. Therefore, it is the highest that sellers should expect the rates to hit before slowing and taking a decline. A rise in price means two things; one, the seller can expect to get higher returns from sale of his/her property. Two, the buyer is pushed to limit in order to afford the high prices. Taking advantage of the current high prices is a good decision instead of risking lower rates expected in 2017.
While predictions for property prices growth in 2016 and 2017 differ slightly, one thing experts point at is that a slowdown is imminent. JPMorgan Chase & Co analysts indicated that 2016 would see an elevated growth, slow in 2017, and decline in 2018. On their focus, Realtors pointed at a 3.6% price increase in 2016 and a sharp dip in 2017. According to these statistics, this could be the best moment to get the top price for any property.
Increased supply of property
In 2015, many counties experienced a low supply of property to the market. This was attributed to the fact that prices were still recovering from the low of 2011. However, this is different in 2016. As prices continued to rise through 2015 and 2016, construction of new properties has risen steadily and is expected to continue later in 2016 and early in 2017. This will lead to a price slowdown that will see property sellers get less if they do not sell in 2016.
In property market, everything is about predicting trends and shaping the market views. However, these predictions have at times failed, came earlier or later. Even when predictions give a rosy picture, it is the external factors that come into play. For example, the current high prices has made real estate developers work extra hard to supply more property in order to enjoy better returns. This could, however, bring the prices down faster than anticipated. The surest way to get better returns is selling that condo, home or villa right away to enjoy the current high prices.
Dipping income rates
The price of property in the market is determined by a number of factors including supply, government policies and future expectations. Another crucial factor is the people’s income. Recently, the level of unemployment has taken a downward trend. This spells doom to property sellers because the demand may start to shrink immediately. With indicators of a slowing economy being evident and levels of employment expected to rise, the immediate impact on property market will be slowing demand and price falls. In addition, the recent new cycle introduced by the Federal Reserve has also introduced rates elevation that will see mortgage prices going higher; a consideration that will make property less affordable. Real estate developers are very keen on these factors and will ensure they sell most of their properties now before more difficult moments come in 2017 and thereafter.
There is greater ease of selling property in 2016
One fact that property dealers underscore is that selling a property quickly is never easy. The process is even more difficult when the there is an economic slowdown. The expected slowing down of property prices in 2017 could have a ripple effect on other areas of the economy. With memories of the recent 2007-2008 economic slowdown still fresh to most people, it is expected that more people might prefer to cut down on spending. This may result to reduced demand and lower prices for property. Take advantage of the current market when buyers are available, prices are good and selling property is relatively easy.
“We are finding that our cash buyers are offering higher amounts and greater selling figures are being achieved in 2016 when compare to last year. The market in the south from our studies is still growing quickly and houses are selling much faster when compared to the north of the UK” says Susan Jones from UK property buyer website Ask Susan.
While the property market has experienced a relatively stable growth since 2011 and 2012, the future looks uncertain. Many predictions since 2015 have pointed at 2015-2016 as the peak before a slowdown. Though the last quarter of 2016 is predicted to experience a little rise in property demand, it is advisable to sell right away when the market is still bullish and chances of enjoying better rates is higher. Take advantage of the current high prices because of the large market and ease of selling property.