Home Prices Move Higher — What It Means for Sellers and Buyers

Couple with New Home
Photo by Andy Dean Photography / Shutterstock.com

It’s a great time to list your home for sale and land a handsome profit.

Yes, we also told you two months ago that then was a great time to sell your home for a killing. But now a second chance is here.

Redfin reports that its Housing Demand Index rose 11.3 percent from April to May. That’s the biggest increase since the real estate website started the index in January 2013.

The index, based on numbers of home tours requested and offers written, is now at the record high of 136. Its historical average, by comparison, is 100.

This demand spike is attributed to the real estate season peak starting, and to the number of homes for sale being at a historic low.

It’s a seller’s market, to say the least. To boot, Redfin expects the growing housing demand to drive home prices higher in metropolitan areas in the next couple of months.

In fact, the site reports that to close deals as quickly and smoothly as possible, “savvy buyers aren’t just offering the highest price; they are using creative strategies like pre-inspections and non-refundable deposits…”

Local housing demands vary

Despite national trends, the state of local housing markets can vary. So the profit you stand to make by selling your home this summer is likely relative to your location.

Washington, D.C., is perhaps the best location for sellers. Its Redfin Housing Demand Index level reached 172 last month.

Compared with last year, the number of buyers requesting home tours is up 87.9 percent in the nation’s capital. And the number of buyers making offers is up 40 percent.

On the flip side, some California metro markets “looked relatively calm in May,” according to Redfin. For example, housing demand index levels were 105 for Oakland, 106 for Los Angeles and 108 for San Francisco.

This could have to do with the fact that those markets are among the most expensive in the nation, however. “High prices tamp down demand and keep many buyers out of the market,” Redfin notes.

How to fetch top dollar for your home

If you’re considering putting your home on the market, start by making a plan. As we explain in “How to Price Your Home So It Sells for Top Dollar,” getting the best price requires a good strategy:

“Sellers may be torn between two approaches …. Both approaches have their place. And both carry risks.”

What’s your take on the current demand for houses? Share your thoughts below or on Facebook.

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