What is the Single Best Time for Buying a Home in Monrovia?

To end the suspense, the answer to the title question about when is the optimal time to buy a home in Monrovia has been officially answered. The answer is, more or less, “now.” All right, there’s an alternate answer, “as soon as practical”—but that is a less dramatic-sounding version of the same thing.

The official nature of that answer is due to its source, generally considered to be the apex of the residential real estate industry: the National Association of Realtors^®. The “®” is there after “Realtor” because the group literally owns the word “Realtor”—that’s how much of an industry leader the NAR is!

I’m a member because of all the resources it makes available for the benefit of my Monrovia clients. Among the raft of those is a steady stream of research about the market, new and proposed California and national legislation, and a wide range of new information about selling and buying a home.

Since its pronouncements need to accurately reflect conditions throughout the country—informing more than a million brokers and agents—its words are (as you’d expect) carefully weighed. Which brings us around to the single best time for buying a home, which the Association shared on January 23: “before 2017 ends.”

 Three “crucial” reasons were presented in Lisa Gordon’s presentation, each of which is hard to argue with:

• Tick! tick! Mortgage rates are rising. No one can be 100% certain of future offerings by Monrovia’s home lenders, yet there has seldom been such unanimity in signals that the future points upward. That means that who lock in rates early should see meaningful savings when it comes to buying a home. To drive the point home, the article harkened back to 1981 and the 18% mortgages buyers had to face. Today it hovers above 4%.
• Tick! tick! tick! Fewer homes on the market. This national trend has consistently moved in the same direction. By November, the number of homes on the market had fallen by nearly 10% from the previous year: a precipitous drop. The Monrovia listings aren’t always in lockstep with national trends, but the potential for even stiffer competition between buyers when spring and summer activity peaks is quite real.
• Tick! tick! tick! tick! Prices are still rising. “We have yet to see a price ceiling,” is what one agent says—and the sales figures bear him out. After the 5% rise in 2016, even pessimistic projections anticipate higher prices.

For sure, neither the NAR nor I are neutral observers when it comes to selling and buying homes—so the hurry-up reasoning might warrant a degree of skepticism. But the changes in Washington have added a new factor barely touched on in the NAR piece: uncertainty. If you are among those planning on buying a home in Monrovia at some time in the future, that might be the most convincing argument of all. The current listings and Monrovia’s real estate environment are knowns—and they are, by historic standard, pretty terrific. You’ll be able to confirm that yourself when you give me a call!

Facts Argue Why Listing in Monrovia Now Might be Shrewd

 If this is going to be a year of upsets, the rules for when listings are best initiated might be primed to fly out the window. There’s no guarantee that 2017’s  listing performance will bend the rules, but if the National Association of Realtor’s^® news site is right, it’s a definite possibility.

The history has long demonstrated that the most opportune time of year to add your home to the house-for-sale listings is during the peak spring and summer seasons. When you look at the volume of home sales through most years, those months do look inviting. There are exceptions, but for the most part, spring and summer regularly excel in sales volume.

Last week, the Realtor^® website ran an article in their Trends area headlining that “This Year, Sellers May Benefit from Listing Early.” Their reasoning was short and sweet—citing recent facts, then drawing a conclusion that’s the opposite of what they seem to indicate. Here are the facts:

1. Supply. It’s a fact that from one end of the country to the other, the residential inventory (supply) is starkly reduced. According to the NAR, “Inventory levels at the beginning of 2017 are at multiyear lows.” Thus, homeowners who list now “face very little competition.”
2. Demand. Even though the late fall and winter months have traditionally shown weak demand, the threat of mortgage rate hikes­­—then the actual rises­—may have been all that was needed to instill a growing sense of urgency among buyers. Early results reflect buyer demand that’s “abnormally strong” for this time of year.
3. Optimism. With consumer confidence at a 15-year high, once the spring buying season gets going in earnest, buyers might find themselves in “buying competition” that will “get fierce.”

These trends are all well-documented. Yet at first blush, they seem to argue against listing your home now. After all, wouldn’t it still make sense for to follow the traditional dictum­—to hold off until that fierce competition takes hold? The answer that flips such a conclusion is found in the fourth fact:

4. Sellers Will be Buyers. Overwhelmingly, national surveys suggest that the homeowners behind most listings will also become buyers once they have sold. In fact, an estimated 85% of American home sellers plan to buy another home! If that’s correct, it’s not surprising that they’ll be grateful if they are quick to sell into this winter’s market. That will not only help them get a jump on the crowd come springtime—it will also lengthen the odds that they can cash in on mortgage rates before they rise substantially. All of a sudden, the net advantage to listing early could be substantial!

The short takeaway is that simply accepting the old common wisdom warrants a second look in 2017. If you are one of our San Gabriel Valley homeowners who automatically presumed the wisdom of waiting a while longer to join the listings, it might pay to reassess. Give me a call if you’d like to discuss how your plans fit into today’s broader residential picture­—and how to take maximum advantage of this year’s market!

2017 Real Estate Projections

Are you curious about what the pundits are saying about the upcoming year in Real Estate? Here is a sampling: 

Fiscal Times: Rising prices will keep pushing up homeowners’ net worth.

CBS MoneyWatch: Millennials and baby boomers will be big buyers; home appreciation rates will normalize.

Realtor.com: Home prices projected to increase 3.9%; new home sales expected to grow 10%.

Nela Richardson: 2017 will be the fastest real estate market on record (measured by average number of days spent on market).

Home Buying Institute: Mortgage rates will rise gradually, but stay below 5%.

The Washington Post: Expect home sales and prices to moderate; suburbs will make a comeback.

Zillow: Homeownership rates will bounce back; rental affordability will improve as incomes rise.

Kiplinger: Rising national GDP, retail sales and jobs growth should result in steady demand for housing—as well as spurring price growth.

What about Monrovia? Give me a call so we can discuss your specific situation with no obligation and no pressure.