A slight drop in interest rates and a number of available homes has helped Maine homebuyers and sellers alike. According to Maine Listings, sales of single-family existing homes increased 8.32 percent in April. This hasn't managed to coax many more homeowners to sell. Unfortunately with mortgage rates going up, this has made homes more costly for first time homeowners and all-cash investors.
Where are the Sellers? Good question. It's slim pickings for a lot of would-be buyers. That brutal winter we just got through prevented many Mainers from listing their homes in recent months. Another part of the reason for the lack of inventory could be that some homeowners are underwater on their mortgages – meaning the sales price would not be enough to pay the current mortgage. Still, warmer weather, job growth and a strengthening economy are expected to encourage more listings this spring.
With few sellers, prices for the limited number of homes available will surge. Would-be buyers, facing a shortage of homes and locked in competition with one another, will have to raise their offers. However, this problem usually corrects itself. Higher prices should lure more sellers into the market who see an opportunity to cash out. This would then then lead to more listings and ease the face-offs among buyers.
Still, each mortgage payment repairs some of the damage and improves a homeowner's equity. As home values grow further, more people will start to put their homes up for sale, and the supply should rise.
While sellers are expected to remain in the driver’s seat in 2014, they will lose some of their power as inventory levels start to improve and rising mortgage rates shift some of the control to buyers. Even if 2014 still favors sellers, experts say we won’t see the buyer’s frenzy in 2014 that dominated many markets last year which led to bidding wars, contingent-free offers and rapid home value appreciation.
As I have said since the beginning, please call a local realtor for all your real estate needs no matter how big or small. We are trained professionals here to make your life easier. It's best to surround yourself with the right team of professionals that can continuously give you the right advice for all your circumstances.
Lisa DiBiase is the owner of Landing Real Estate.