What Sellers Need To Know
What a time to be a seller in the real estate market over the pandemic. We saw record low supply, record high demand, record number of multiple offers, record price increases, and so much more. However, the euphoric time to be a seller may be coming to an end in the following months. While sellers still control the market, there has been a shift in the recent months. No, you did not miss your chance to cash in on being a homeowner. But there are a few things that sellers need to know moving forward.
Buyers and Sellers
Motivated buyers are always going to be out there, no matter the market. Just how many of them there are is the difference. As we saw during the pandemic, there were more motivated buyers than ever before. A lot of these buyers already bought, moved, and are out of the market. Some of them waited too long and were priced out. And some of these buyers became renters. However, there are still motivated buyers and low supply, so sellers are still going to make some money. But what sellers need to know is that your time of multiple over-list offers with no contingencies is probably over.
According to one of our favorite real estate economists, Lawrence Yun at NAR (National Association of Realtors):
“Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”
Sellers Need To Know Good News
This is great news for those sellers who do not think their house is a diamond in the rough, or over an oil field. Sellers who are using educated agents who have done their research on the surrounding market will benefit from quick sales still. However, days on market, on average, has started to tick up into the mid-to-late 2022 year. Some homes still sell in a weekend with multiple offers, but that happens in every market. However, the pure insanity of 5+ offers in the first hours on the market is probably not going to happen.
Buyer demand has slowed recently due to a number of reasons. Most importantly, buyer demand has slowed tremendously due to the rapid rise in prices and mortgage rates. Bidding wars, over ask offers, and more pandemic phenomenon are coming to an end. Personally, that is likely for the best. Less competition allows for a more neutral, to buyer-neutral market. In these markets, buyers and sellers tend to do well, as most of the time both parties are working towards a similar goal: closing.
Look At The Data
But sellers should not forget that the decline in demand is based off the red-hot, historical real estate market we saw over the past 2 years. Many people believe we are in a ‘housing recession’ based on year-over-year numbers. However, if we look at a longer dated graph of data, we can see that buyer demand is hovering around, or slightly above pre-pandemic levels. However, this does not show up in the new and existing home sales categories because those track year-over-year.
According to the Confidence Index tracked by NAR, about 40% of the homes sold over list price so far this year. That is down from 51% from last month, and from 50% last year. So, for sellers, what do you need to know? Well, sellers need to know that they are still in charge of the market and they should pounce on their opportunity to run with it.
Sellers Need To Know Experts Agree
Selma Hepp, Interim Lead, Deputy Chief Economist at CoreLogic, explains what’s happening and what it means when you sell:
“Signs of a broader slowdown in the housing market are evident, . . . This is in line with our previous expectations and given the notable cooling of buyer demand due to higher mortgage rates. . . . Nevertheless, buyers still remain interested, which is keeping the market competitive — particularly for attractive homes that are properly priced.”