The housing market has seen significant shifts recently, moving from a frenzied seller's market toward a more balanced environment. Here’s a quick breakdown of what this means for buyers and sellers:
Understanding the Market Shift
Balanced Market Definition:
A balanced market typically has around six months of inventory, where buyers and sellers have equal footing. Currently, we’re at a four-month supply, indicating progress, but still leaning toward a seller’s market. It is important to note this increase in inventory is not leading to an oversupply that would cause a crash. Even with the recent growth there’s still nowhere near enough supply for that to happen. At the moment it is still a seller’s market, but it’s just not as frenzied as it’s been over the past few years. As Mark Fleming, Chief Economist at First American, says: “The faster housing supply increases, the more affordability improves and the strength of a seller’s market wanes.”
A balanced market typically has around six months of inventory, where buyers and sellers have equal footing. Currently, we’re at a four-month supply, indicating progress, but still leaning toward a seller’s market. It is important to note this increase in inventory is not leading to an oversupply that would cause a crash. Even with the recent growth there’s still nowhere near enough supply for that to happen. At the moment it is still a seller’s market, but it’s just not as frenzied as it’s been over the past few years. As Mark Fleming, Chief Economist at First American, says: “The faster housing supply increases, the more affordability improves and the strength of a seller’s market wanes.”
Current Trends:
- Longer Time on Market: Homes are taking longer to sell, giving buyers more time to explore options.
- Fewer Offers for Sellers: Sellers may face reduced interest and need to be flexible on pricing and terms.
- Negotiation Power for Buyers: With more homes available, buyers are less likely to skip inspections, increasing their leverage in negotiations.
What This Means for You
Here’s how this shift impacts you and the market conditions you’ll face when you move. Lawrence Yun, Chief Economist at NAR, explains: “Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.”
For Buyers:
- More Choices: Increased inventory means a broader selection of homes.
- Room for Negotiation: You can take your time and negotiate terms that work for you, including inspections and repairs.
For Sellers:
- Adjust Your Expectations: Be prepared for longer selling times and possibly fewer offers. Pricing your home appropriately is crucial.
- Negotiation May Be Necessary: Expect to make concessions to appeal to buyers, particularly regarding repairs.
Staying informed about local market conditions can help you make the best decisions, whether you’re buying or selling. If you want tailored insights or data, feel free to reach out!
