New Homes Get Costlier to Build – Is this good news for sellers?

According to a new report by the National Association of Home Builders, construction costs for single family homes are at the highest levels since 1998. Lumber prices jumped 40 percent between April 2011 and April 2013.

What does that mean for you, the seller?

That’s actually good news. Typically, resale home prices trail new construction prices. So if new homes cost more, your home price will also go up.

Is this a good time to sell your home? Here are some facts:

1.      Interest rates are rising – today’s rate is 4.375% (from Wells Fargo) as opposed to 3.77% in January 2013. Which means that for a given monthly mortgage payment, buyers will have to settle for slightly smaller homes or with less features.

2.      There are fewer homes on the market as compared to previous years.

3.      We are seeing more and more boomerang buyers. These are people who went into foreclosures or bankruptcy 3 – 5 years ago and are back in the market to buy homes.

In the last 3 years, homeowners have tried to sell their homes but could not get the price they wanted. This spring may get you a better price.

Do you need a new market analysis? Call me at 803-348-9922 or email me at vsashikant@gmail.com for a FREE market analysis.

 

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