Home prices have been on the rise since 2012, after taking a huge hit during the recession. This has been great news for many home owners – of course we all love to see our investments grow. While in 2014 and 2015 we saw prices inflate almost to the point of excluding many buyers, 2016 will likely be a year or normalization – with an increase in home values at a normal pace.

 

In many places, it still remains a “Seller’s Market” – which typically means that inventory is so low that buyers have less choice and are required to pay the prices being asked or drop out of the market all together. It gives the seller the upper hand, and is often measure in “month’s supply of inventory,” which shows the number of months it would take to sell off the inventory in a certain location. When this number is under six months, it is generally referred to as a “Seller’s Market,” and when the number is over six months, it’s a “Buyer’s Market.” Ideally it remains balanced, between five and seven months, meaning the market is good for everyone.

 

The thing about inventory is that it is hyper-local. One Charlotte neighborhood could be operating at a one month supply of inventory, while another Charlotte neighborhood could be operating at an eight month supply. Typically you see a larger supply in the upper-end market, because they take longer to sell. It really takes an expert to analyze for you the trends happening around your home.

 

So if it’s still a “Seller’s Market”, why is 2016 a good time to buy? Well, mortgage rates are still historically low, and while they will likely remain steady for the bulk of the year, they do have to go up at some point. Right now you can afford more home if you will be getting a loan. Because home prices are becoming steady, there’s less worry about being priced out of the market. Just as home prices have increased, so has the cost of rent in many cities. If you are renting now, you may want to have a loan officer work up a financial worksheet for you to see what a monthly loan payment would be. You may be surprised to find that it may cost less monthly to buy a home.