Knowing About Seller’s Markets
For those that haven’t been following real estate news, you’ve still most likely heard about the current sellers’ market. This is mostly because there is a lot of talk about the real estate market in today’s media. What most people have heard about is how of a strong of a seller’s market we are experiencing in the current landscape. For those who want to sell their houses, their has never been a better time. However, for those thinking about listing their house, you probably should continue knowing about seller’s markets.
Explaining A Seller’s Market
The latest Existing Home Sales Report from the National Association of Realtors (NAR) continues to let the market know that housing supply is still very low. There’s a 2-month supply of homes at the current sales pace. This is higher than it has been in the past few months, mainly because of higher rates scaring buyers away. However, this is still historically low and definitely considered a seller’s market.
Generally, a 6-month supply of homes on the market is necessary to be considered a normal or neutral market. This is where there are enough homes available for active buyers. Because of this, the housing market is still considered deeply into sellers’ market territory (see graph below):
Why Knowing About Seller’s Markets Can Benefit
When housing supply of houses for sale is as low as it is right now, for how long it has been this low, it’s much harder for buyers to find homes to purchase. This creates increased competition among purchasers which can lead to more offers on a single home than ever before. However, according to more NAR data that came out this week, the number of homes with multiple offers is declining luckily. For buyers who know they may be entering a ultra competitive market, they need to do their best to submit their best and final offer up front. While this might not give you much room to negotiate, it does allow the seller to know what you are willing to spend upfront.
Seller’s Market Coming To An End?
Also, you have to think about how mortgage rates and home prices are climbing together. This means serious buyers should be motivated to make their home purchase soon, before those two things rise further and impact affordability more. For sellers, this is great news in the short-term, but could mean disaster for the long-term. If you are a seller who is on the fence about selling, now is the most opportune time. While home prices will likely not fall for a few years, the demand is certainly going to continue to fall. For sellers, that means if you put your house on the market while supply is still low, it will likely get a lot of attention from competitive buyers.
Knowing About Seller’s Market Conclusions
For buyers, it is important to buy now before being priced out becomes a real threat. And for sellers, it is important to make your decision soon before the market dynamic changes. We are so used to the strong seller’s market, but it will not last forever. This is important to realize in the coming months, as the landscape of the housing market continues to change.