Still A Seller’s Market
As many people have drilled over the past few years, the real estate market is still a seller’s market. In fact, this is the strongest seller’s market in decades, maybe of all time. According to seller sentiment gauges, there has never been a better time to sell your home. This is compared to the record low buyer sentiment, as buyers say it has never been harder to buy a home. Here is why we the real estate market is still a seller’s market and will likely remain that way for the future.
According to Keeping Current Matters, a buyer’s market is one that has over seven full months of inventory on the market. A neutral market is one that has between six and seven months of inventory. And finally, a seller’s market is described as one with less than six total months of inventory available to the market. Well, we are currently in a market with around two months of inventory. This is actually higher than during many points of this housing market, and significantly higher than the low of seven-tenths of a month of supply.
Supply and demand are the most influential aspect to the seller’s market we are seeing today. This is influential because it determines prices in the short-term, and impacts rates over the two-to-five year timeframe. As we can see now, 30-year fixed-mortgage rates are on the rise, based on the overwhelming demand on the market. This will still favor sellers, as higher mortgage rates will limit buyers in the short-term.
Still A Seller’s Market Dream
Over 70% of those surveyed believe that this is a great time to sell. This is up even higher than it was in recent history. In fact, 72% of people believe that selling now is a smart idea. This could lead to the seller’s market coming to an end, as a higher number of people think it is a good time to sell compared to buy. However, because of how limited supply is right now, there will be a delay in how this supply will impact the market.
Sellers currently benefit the most, especially in such a tight market with such high demand that does not mimic demand. Over the past twelve months, sellers have receive the most offers on record. In a typical market, sellers expect to see one to two offers on their house. But, as we have said many times, this is not a typical housing market. In this market, sellers can expect to see close to five offers on their listing. This is higher than it has ever been, and looks to continue for the next months.
Home Prices And Sales
Home prices are also impacted directly by supply and demand. We can see this over the past two years in the market, starting in 2019 before the pandemic was even a thing. Home prices have continued to increase, and will continue to increase. Experts have already risen their expectations for home price increases this year. The predictions went from around 7% this year to around 10% this year. This is even factoring in higher mortgage rates. Home price valuations have increased by close to 20% in the past twelve months.
Finally, let us talk about the home sales process. Homes are selling at a record pace, and look to continue to do so. If you are a first-time home buyer, you may have noticed this in the market. Move-in ready homes are selling in a matter of three-to-five days, after receiving multiple offers in the first few hours. Homes are selling at a record pace, even as the pace has slowed slightly in 2022. Home sales are happening in just 18 days this year, from list to close. That is a record and hard to believe that homes can finish a sale in that little amount of time. Here is to hoping that things normalize soon.