3 Reasons Why 2022 is a Great Time to Sell Your Land
The Land Up Dirt to Dollars Series
Is it a good time to sell your Texas property? It’s a question plenty of potential sellers are asking themselves, especially after real estate market prices rose so rapidly in 2021.
From our analysis of trends, the answer is yes.
What we know now is that there is huge demand for land, decreasing days on the market, and increasing prices–it’s a great time to take advantage of it and sell your land.
There’s no telling how long the demand to buy land in Texas will outweigh the supply. To help you understand the market, here are the top reasons why you should sell in 2022:
Interest Rates Are Rising:
With Interest rates on the rise, this is your opportunity to take advantage of selling your land before rising interest rates reduce your ability to get the best price in the shortest amount of time.
Not sure how this works? Let us explain.
When the Federal Reserve (Fed) adjusts the interest rate on the money they loan to banks, it in turn affects the interest rates in which banks lend money to buyers for property loans. Rising interest rates tend to decrease demand for property because the lower the interest rate is, the lower the total amount a buyer will end up paying over the life of their loan. Nobody wants to pay more for the same piece of land.
When there is more demand for land and more buyers looking to buy, it drives up prices, which is good for sellers. It's also important to note that when interest rates rise, the cost to obtain a mortgage can increase through things like “buying points” (paying upfront cash to reduce your interest rate) and can lower demand and prices of real estate.
Although the Federal Reserve has only increased interest rates minimally in the past few years, over time higher rates for loans will decrease your Texas property value.
If you can think about it in terms of property sales, the real estate market for 2022 is as strong as ever.
Interest Rates Are Still Historically Low:
Interest rates hit all-time lows during the pandemic, around 2.6% for a 30 year loan. Even though rates are starting to rise into the 6% range for a 30 year loan, this is still historically low. In the 90s the average rate was 10.13% and in the dreaded inflation riddled 80s rates hit a historic high of 16.63%. For context, you can currently get a credit card for around that same rate as a mortgage in the 80s.
All this to say, yes, rates are on the rise but it’s still a seller’s market and a good time to list your land before things start to shift to a buyer’s market.
So if you’re thinking about selling your land, here are a few tips to keep in mind:
Know the Trends
Price It Right
Make Your Listing Look Great Online
Not sure where to start? Our team of experienced REALTORS would be happy to give you the scoop.
The Real Estate Market Will Level Off:
To top it all off, after more than a year of skyrocketing demand and skyrocketing real estate prices, the market appears to be cooling off.
When mortgage rates dropped in 2020, land buyers were more inclined to purchase property, which set off a frenzy for real estate in Texas. Because of the push in demand, the market is now facing lower inventories, which are causing a rise in mortgage rates.
People are asking, “Is the real estate market crashing?” Experts say no, the housing market is definitely not collapsing, but dwindling future supplies and the increasing borrowing rates are expected to slow land-price growth and cool the frantic housing market.
Many in the industry foresee the real estate market stabilizing so it’s best for sellers to take advantage of current market trends now while things are still in their favor.
It’s a Sellers Market:
If you’re still on the fence about selling your land in Texas, give us a call anytime to learn more. Our goal is to give you the best options and tools for selling a property, which include REALTORS that specialize in land sales and unique online marketplaces to gain more exposure and a high selling price.
We look forward to helping you with your real estate needs! Ready to sell? Find out how to get the most for your property.