The real estate market has seen a surge in demand over the past year, with many homeowners looking to take advantage of low interest rates and favorable market conditions. However, a fear of limited listings and high rates is holding back many homeowners from making a move.
One of the top issues facing homeowners who want to upsize or downsize is the lack of available homes on the market. With inventory levels at historic lows, finding a replacement home has become a major challenge. This fear is keeping many homeowners from listing their current homes, which is contributing to the limited supply and driving up prices. As a result, potential buyers are becoming increasingly frustrated as they struggle to find a home that meets their needs.
To address this issue, some companies have emerged that offer assistance to homeowners who want to buy a new home before selling their existing one. These companies provide cash to homeowners to help them make a down payment on their new home, allowing them to secure a new property before selling their current one. However, these companies are not available in every state and may require sellers to accept a lower selling price or a fee structure that they are not willing to consider.
In addition to the fear of limited listings, many homeowners are also concerned about the potential for high interest rates. With interest rates at historic lows, homeowners who have locked in a low rate on their current mortgage are hesitant to move and potentially lose their favorable financing terms. This fear is keeping many homeowners from taking advantage of the current market conditions and making a move.
Another factor holding back homeowners from moving is the potential for a major federal capital gains tax bill. If homeowners sell their current home and make a profit, they may be subject to capital gains taxes on that profit. This can be a significant financial burden and is deterring many homeowners from selling their homes.
Additionally, homeowners are concerned about potential increases in property tax payments if they move to a new home. Property taxes can vary significantly depending on the location and size of the home, and homeowners are hesitant to take on the additional financial responsibility.
Furthermore, the rising cost of building materials is another concern for homeowners who want to improve their homes before selling. The cost of lumber, steel, and other materials has skyrocketed in recent months, making it more expensive for homeowners to make necessary repairs or renovations to their homes. This is another factor contributing to the limited supply of homes on the market, as homeowners are reluctant to invest in improvements when the costs are so high.
In addition to these financial concerns, many older adults are choosing to age in place rather than move to a new home. Aging in place allows seniors to remain in their current homes and communities, where they are familiar with their surroundings and have established social connections. This trend is contributing to the limited supply of homes on the market, as older adults are choosing to stay put rather than downsize or move to a retirement community.
Despite these challenges, real estate professionals have an opportunity to establish meaningful relationships with homeowners and help them navigate the current market conditions. By engaging with homeowners and discussing their dreams and aspirations, agents can keep potential sellers viable and help them overcome their fears and concerns. Whether it’s moving up to a larger home, downsizing to a more manageable space, or relocating to a better school district or community, real estate professionals can play a crucial role in helping homeowners achieve their goals.
The real estate market is constantly evolving, and the fears and concerns of homeowners will change over time. By building trust and maintaining open lines of communication, agents can position themselves as trusted advisors and remain top of mind as homeowners consider their options. As inventory levels increase and interest rates fluctuate, real estate professionals can provide valuable guidance and support to homeowners, helping them make informed decisions and achieve their real estate dreams.
Presented by:
Tina Yakel, Broker Associate