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Sellers' market arrives in residential real estate

A seller's market seems to have returned for the residential real estate sector with sellers in Delaware and elsewhere seeing multiple offers and fast turnover on listings. A 5.5 percent increase in sales were seen across the country for the month of February, and a jump of 11.4 percent in pending sales for the Midwest region. The national rate for signed contracts is 2.6 percent higher than February 2016. The chief economist with the National Association of Realtors shared his thoughts on the factors behind this increase and the possibility for continued optimism.

Low supply is one of the primary reasons for growth. The problem is such that low supply of residential real estate is forcing higher prices in light of the increased demand and pricing new buyers out of the market. The counter-balance to this is an improved economy and higher levels of employment. This is providing buyers with more income and the push factor of potentially higher interest rates later in the year.

Whether or not interest rates in fact rise, the current low-rate environment will likely sustain buyers looking to take advantage of this for more favorable contract terms on their mortgage. Steady economic improvements are not a given, but one sector is set to make gains. Residential development companies are expected to capitalize on the demand.

Home buyers in Delaware face the conundrum of chasing possibly lower interest rates now or lower sale prices later with production of new inventory. With sustained demand, investors looking at land development for residential property are likely to enjoy plenty of upside in the 2017 market. Buyers and sellers of residential real estate need to protect their investments. Experienced legal counsel may offer protection from title issues, lack of disclosure, running afoul of state laws and local zoning laws, and tax blunders.

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