Looking at the latest headlines regarding any real estate news, it’s no wonder sellers may be finding themselves nervous, apprehensive, and even anxious. It may even have you outright questioning your plans about selling your house. Don’t worry too much, because we’ve got a few ways to show how a trusted real estate professional can help you navigate the shift which is happening in the market cooldown and explain how and why it’s still a sellers market.
Lower Inventory For Sale than Pre-Pandemic
National Housing Supply has been historically low, and while there are more homes for sale this year (compared to last), it’s still landing us nowhere near what would be considered a balanced market. A recent article from Calculated Risk helps put this year’s inventory into context (utilizing graphic below)
Essentially housing supply levels have surpassed 2021 levels by over 30%. Great, right?! Hold on…
Since the further back you look, the more the “Big Picture” comes into play. Compared to 2020, we’re just barely above the level of inventory we saw back then. Head back to 2019, the “last normal year of real estate”, and you’ll see we’re sitting roughly 40% below the housing supply we had at that time.
That’s a really big deal… inventory is still very low. There is still demand for your house, because there just aren’t enough available homes for sale. You will still command a better price in the market today, with the right team and a great strategy.
Homes Are Still Selling Quicker Than Pre-Pandemic Years
Homes are not cruising through closings like they were even just a few months ago – but don’t worry, it’s not a bad thing. The important thing to note is the average Days On Market (DOM) spent is still well below pre-pandemic norm, and this is due in part to inventory remaining so low. The easy to read graph below uses data from the Realtors Confidence Index by the National Association of Realtors (NAR) to illustrate this trend:
You can see our “normal” pre-pandemic numbers (shown in blue) are higher than what we saw as the pandemic unfolded (shown in green). As time went on, demand for housing soared and the average DOM decreased as buyers rushed in scoop up homes at record pace. Recently though, we’ve seen a cooldown in the market, which will also mean a slight uptick in the time a home will sit on the market before going under contract (shown in orange). However, we’re still far below pre-pandemic numbers and it’s nothing to “worry” oneself over as the frenzy over homebuying calms down.
This is why we stress over and over – choose your real estate team wisely. Price your home correctly, and it will sell quickly… just not instantly. It’s time to readjust those pandemic-market expectations.
Buyer Demand Had Moderated Itself
Buyer demand has softened a bit, largely in part due to rising mortgage rates. We’ll say it again though – perspective is key to this entire thing. It’s not typically normal to get 3-5, or even more, bids for one home. This happened during the height of the pandemic, but we’re seeing this trend calm down as well now that we’re seeing a slight increase in inventory returning to the market. Looking at the graphic below with data from NAR, you’ll see as far back as 2018 how this shift is being affected:
Pre-pandemic levels (shown in blue) showed it was normal for sellers to get roughly 2-2.5 offers when they listed their homes for sale. During the pandemic though (shown in green), with housing demand soaring through the roof and mortgage rates dropping to historic lows, we saw the number of offers skyrocket per transaction. Heck, during the height of the feeding frenzy, some of our listings saw between 15-20 competing offers! Frankly, we’re happy to see things normalizing to a healthy market.
Today we’re seeing things level out – mortgage rates are back up, inventory is slowly gaining, but still below where it needs to be to sustain a “balanced” market, and offers per house are dropping back to their normal numbers.
What Does This Mean For You?
Well, simply, it means invest wisely. Choose the best team of professionals you can. Interview several real estate agents to get a feel of what they each offer, and compare. After all, your Realtor will be brokering one of the biggest investments of your life.
Make sure your team is well rounded and has a clear plan of execution – what do they include for marketing? What strategies to they employ? What’s their timeline for listing and their track record for getting other clients properties Under Contract to Sold? What’s their client satisfaction rating?
Catherine and Tiffany pride themselves on their thorough processes and client care. If you or someone you know is looking to buy, sell or invest in real estate, make the referral! Your friends will be glad you did!