Is the housing market frenzy really going to cool off this fall? How does the housing market look heading into the fall? Did the peak selling season pass by? Should buyers waited out a bit longer? Are we in a housing bubble right now? Will home prices fall? Maybe you’ve had these thoughts or questions, or you’ve seen the headlines everywhere. And just like everything else that you read, it’s hard to sort out what’s fact or fiction, or make any decision for yourself in your situation. In this video, I’m going to help sort this out for you.
Hi, my name is Sabrina Shaw, with Homes by Sabrina and eXp Realty. And let’s get right to the point. According to Ali Wolf, Chief Economist of building consultancy, Zonda, the fever in the housing market has broken. Conditions are beginning to normalize. And let’s face it, after a roller coaster of a spring season, when supply of homes continue to decrease while the price of homes soared, buyers got involved in cutthroat bidding wars, and after losing out on dozens of offers, many just decided to quit. Buyer fatigue was a real thing. And the saving grace was those record-breaking mortgage rates that helped offset the rapidly growing prices, giving some financial relief to the question of by now or wait. Those buyers who are temporarily sidelined handled out some of the demand as more inventory comes to hit the market. And this has allowed some breathing room because there is less competition. Homes aren’t selling for crazy amounts and over asking, and they’re taking longer to sell. Realtor.com reports that nationwide, in September, the rate of year-over-year growth was halved to 8.6%, down from its peak of 7.2% in April. And the median list prices of homes grew only half as fast as they did in the spring. They also took longer to sell, averaging 43 days. Now that being said, let’s put that in perspective. 43 days on market is still a fast turnaround, considering in September of 2020, homes took 54 days to sell. And in 2019, they took 65 days to sell. Lawrence Yun, Chief Economist of the National Association of Realtors offers some relief to buyers. Things are settling down. There will still be some multiple offers, but it will be less tense, he says. So what’s going to happen is it’s going to be a good time to buy a home. Will home prices drop? As I’ve said before, home prices dropping is likely not going to happen. Not in the way that most people think, at least. We’re still in a severe housing shortage. There are still a lot of people who need or want to buy a home. Mortgage rates are still historically low.
Now, anytime the market starts to cool, you’ve got people on the sidelines waiting for their chance to get in. And that keeps both home sales and home prices from declining too much, says Danielle Hale, Chief Economist of Realtor.com. Although experts expect more homes to hit the market and mortgage rates will continue to rise, it won’t be enough to absorb the fact that the U.S. is still short about 5 million homes. All of this to say that home prices could level out a bit more, but it’s not a crash.
What about for sellers? Did you miss the peak of the season? The short answer is no. We’re still in a strong sellers market, seeing less than two months of inventory available. But the days of being able to have your cake and eat it too are most likely over. Throughout the past year, sellers have had upwards of 10 to 20 offers to choose from, all of them waiving contingencies. And to be honest, it’s created a misconception that it isn’t necessary to get your home in tip top shape to sell it. Now, moving forward, if you’re going to sell your home, you’re more likely to get top dollar if you put in a little bit of work to fix deferred maintenance items, go in some fresh paint, have an agent who provides some kind of staging. And most importantly, partner closely with your agent to determine the best plan for you.
For more information on this or any other real estate questions, feel free to reach out. I’m Sabrina Shaw with Homes by Sabrina and eXp Realty, transforming lives one home at a time. And remember, I am always here to guide and serve you.