Residential Real Estate Update
The residential real estate market is still active with buyers and sellers. While the market has cooled in comparison to the last two years, we remain in a market of low inventory. In order to have a balanced market we need to have six months of inventory and currently, we are only at 2.6 months of inventory in Marion and Polk counties.
This shows that it’s still an appreciable time to sell a home as we have seen a significant rise in home appreciation over the last few years. As home appreciation has risen many have gained substantial home equity. What does this mean?
It means now may be the perfect time to sell for senior citizens who have the goal of retiring soon. The sizable amount of equity you have gained in your home allows you to have options. For instance, have you thought about living with family members so they can help you with daily activities, moving out of your home with stairs and yard work into a more appropriate home based on your needs, or are you looking to live a stress-free lifestyle by moving into a senior community?
One way you can increase the desirability of your home if you choose to sell is by offering to buy down the buyer’s interest rate. Right now with the rising interest rates, it can be difficult for buyers due to affordability, however with a 2-1 rate buy down this is a way to reduce the buyer’s mortgage payments for the first two years. How this works is the first year of the buyer’s mortgage payments the interest rate will be reduced by 2% then in the second year, the interest rate will be reduced by 1%, and by the third year the buyer’s original interest rate would remain the same for the remainder of the loan. This is a creative, yet effective selling point for sellers to offer to buyers in these current market conditions. If you haven’t thought about what you want your retirement phase of life to look like yet, now is a great time to get started.
Take advantage of your home equity to support your transition into retirement.