The rules are continually changing, as we have all seen in the past few years. What was once a buyer’s market; with an over abundance of inventory has changed. As we have seen last year, many desirable areas have seen a glut of inventory, changing into a seller’s market for some.
Although most of these areas may favor sellers, it will not be as extreme as we have seen this past year. Areas that are in high demand and have shown strong signs of improving will see less distressed properties coming to market. Those that do, are highly sought after and typically go under contract quickly. As inventory stays low, especially for distressed assets, market values will slowly increase as resales and new construction homes will become more marketable.
Investors will move onto other, less competitive neighborhoods as well, starting the process over and slowly draining inventory in those areas as well.
With rates on home-equity loans low, many owners may decide to remodel – either for resale purposes, or for themselves. Updated homes still attract a high number of buyers, especially those in areas with low inventory. Potential sellers should watch that market and time their sale with inventory and potential increases in borrowing costs.