Noticing an increase in the number of “for sale” signs in your neighborhood? When homeowners stand to gain more than usual from selling their homes, families who weren’t intending to sell may be convinced to pack things up and start a listing. You might not be one of them, but the seller’s market can still affect your finances in the following ways.
More Expensive Repairs
As new homeowners move into the area, they’ll likely be putting a strain on services that offer plumbing, painting and other household necessities. You may find that these service providers are booked out further in advance, making it difficult to schedule your own repairs. Or they’ll take a rush job — for a higher price than usual. It may be wise to consider scheduling any repairs as soon as possible if you begin seeing more sale signs in the area.
Changes in Resources
New homeowners bring new priorities. Jacob Vigdor, a public policy professor who has studied the effects of gentrification — a common effect of seller’s markets in low-income areas — found priorities can shift the amount of public resources allocated to specific services.
If new residents typically consist of families whose children are grown up and no longer living at home, for example, funding to schools may eventually take a lower priority than infrastructure. As property values and the accompanying property taxes increase, residents who stick around may find themselves paying more to support programs that they may not consider important.
Higher property values can also result in rent increases if you haven’t already purchased your property. As the homes and other buildings in your area become more attractive to buyers, landlords may realize they’re justified in raising their own prices. They should only be doing so when your lease is due for renewal, so be sure to know your local regulations and get support if you feel your rights are in jeopardy — but this is too often a painful reality for renters in evolving areas.
Some sellers will receive offers from people who have no intention of living in the home. Instead, they plan to rent it out through AirBnB or other services. An abundance of vacation rental properties can make long-term rentals hard to find for residents, and may even make neighborhoods feel empty as the houses sit vacant waiting for short-term visitors. Though not a financial impact exactly, this is certainly a big consideration in many neighborhoods of late.
Entire neighborhoods can change drastically in a seller’s market, making it important for residents who aren’t selling to be aware of what’s happening and take some quick precautions. Save money where you can and stay involved in the local political scene. As an informed resident, you’ll be better prepared to handle whatever financial changes come your way.
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