We knew supply was low....now demand has also increased!!

When supply is very low, an ordinary level of demand feels like very strong demand because there are so many buyers chasing each available home for sale. However, there are some indications that the level of demand is starting to increase beyond ordinary. One of these is at the national level where the Mortgage Banker's Association has reported a massive jump in loan applications. The 3-week moving average has risen 20% since December to a new high point for the cycle. This is probably for a number of reasons:

• low interest rates
• confidence in the strength of the economy
• loosening lending standards
• buyers wanting to avoid missing out as prices start to accelerate upwards again

Whatever the reasons, a surge in demand in January, before the spring buying season has properly got underway, suggests we are going to have an extremely unbalanced situation with demand rising and supply falling even further.

If you are looking to buy and fall into the category of "I'll wait this out" it could be very expensive.

The scenario is obviously specific to the individual and would be based on your price range, location etc.  The most obvious, and most common circumstance, would be a sale and "upgrade" in either size or location.  If this is the case you more than likely would be hit with 2 factors making a "hold" scenario not financially beneficial.  Appreciation is often % based so less expensive homes appreciate at a slower rate meaning you are losing purchasing power as the more expensive home you're looking to purchase in the future will go up in value faster than the one you currently own.  The second factor is interest rates.  With no end in sight on the economy increasing you will lose buying power with any rate increase.  

This is only exponential if you are currently renting.

Now, if you know me at all you know that I will try everything in my power to convince you to not sell and move.  It's just to expensive most of the time.  However, given the circumstance above it would make much more sense to do this asap.

As an offset, a great example of who should stay put would be someone looking to downsize.  Again, price and location-specific however your increases over time in a fast appreciating market pay off in larger chunks.  

If you want to chat through your circumstance I dork out on this stuff.  Please don't hesitiate to reach out.