Why NOW is the Best Time to Sell in Fargo, ND…
Why NOW is the Best Time to Sell in Fargo, ND…
If you’ve been considering selling your home and you live in Fargo, ND, we’ll explain to you why now is the best possible time (with a caveat at the end).
You might think it’s nearly impossible to sell your house during a pandemic, but there are a myriad of ways to put your house up for sale, and — for reasons that we’ll explain later on — property values have never been higher.
But, first, let’s talk about why it’s a good idea for most people to sell in the first place.
Your Primary Residence Isn’t as Good an Investment as You Think
- Over the past two years, over 90% of the world’s millionaires have been created by investing in real estate.
- The average homeowner in the United States has over 40 times more wealth than the average renter.
- When it comes to building wealth, researchers from the US Census Bureau determined that homeownership is one of the biggest factors that predict the wealthy.
So, reading through these statistics, you might be convinced that it’s a great idea to own your own home. After all, people who own their own homes are much wealthier on average than people who rent, so why would you even think about selling? And most millionaires are even created through real estate investing. It’s a no-brainer, right?
Virtually Everyone Forgets About Maintenance Costs (And Opportunity Costs)
Let’s crunch the numbers on how much your house is likely costing you to analyze whether or not it’s a good investment.
In Fargo, ND, the median home value last year was roughly $210,000 and the average effective property tax rate was $2,700.
So, here’s an estimate of average monthly costs using a 3.5% interest rate and a 30-year fixed mortgage:
- Mortgage payment: $993/month
- Homeowner’s insurance: $100/month
- Property taxes: $225/month
- Maintenance (1% of home’s value per year): $175/month
- Total costs: $1493/month
Meanwhile, the average 2 bedroom apartment (and house) in Fargo only rents for $755/month — roughly half what it would cost to buy an average property.
If you’ve been looking to downsize but you still want to stay in Fargo, then the numbers are incredibly clear: you could be saving $750/month on what’s likely to be one of your biggest expenses. As for building equity, only a small fraction (about a third) of that monthly payment goes toward building equity anyway, so you can easily invest the difference between renting and owning in the stock market or REITs, and earn a much more liquid return on investment.
All in all, you’re missing the opportunity cost of renting and investing in the stock market, which compounds indefinitely. There’s a limit to how much your house will be worth one day, but there’s no limit to how much you could make in the stock market.
With that said, isn’t real estate all about location? If now is the best time to sell in Fargo, why are we buying?
Fargo, ND Real Estate Market Analysis
Well, for one, Autopilot Properties specializes in buying distressed properties, fixing them up, and reselling them. This process results in a better community, more attractive properties, higher quality tenants, and (we hope) a profit.
In a previous article, we’ve written about the Fargo, ND real estate market. It’s increased 4% year over year, which is higher than the average across the United States. There are great opportunities for employment, healthcare, and recreation. There’s a great school system. And, of course, Forbes has ranked Fargo one of the best places to retire for over ten years in a row.
With all this going for it, won’t Fargo real estate prices likely go up? Well, yes and no. In order to understand why, you need to understand the difference between a buyer’s and seller’s market.
Buyer’s Market vs Seller’s Market
What’s the difference between a buyer’s market and a seller’s market? And how can you be sure it’s the right time to buy or sell?
A buyer’s market is when there’s more supply (houses) than demand (homebuyers).
A seller’s market is when there’s more demand (homebuyers) than supply (houses).
Simple enough, right? Well, all time low interest rates are creating an atmosphere for a seller’s market. Right now, people can buy houses at a discount, with favorable lending rates from the banks. Additionally, there’s a chance that President Biden will further fan the flames of the real estate market by offering a $15k grant to first-time homebuyers, which will bring even more people into the market.
When there are a lot of buyers and not a lot of supply, it becomes a seller’s market. And, in a seller’s market, the seller tends to benefit — because he or she can charge high prices.
Conclusion: Why NOW is the Best Time to Sell in Fargo, ND…
Your house might be costing you more money than you think. If you’ve been considering downsizing for some time now, then selling right now is a really great option.
Interest rates are at an all time low, and there’s some speculation that there might even be more grant programs for the government that further spur interest in the housing market.
When there’s a lot of interest, that creates a seller’s market.
In a seller’s market, prices for homes grows ever higher.
If you’re interested in selling, contact us to find out more. It doesn’t matter what condition your house is in, we’re interested in buying regardless.