When will the housing market shift? Well, prices are still high, but they are no longer crawling upward and are instead starting to decline slowly. According to Redfin, there are so many advantages in the real estate market right now and it may increase your buyer’s interest in getting back in the game.
It’s finally happening —or the first time since early March, the median home sales price missed hitting a month-over-month record high and is starting to level off instead of continuing to climb!
This definitely calls for celebration, especially for those looking to buy. However, according to Redfin, home prices are still high compared to what they were last year during the same time period from June to July. Although, according to Freddie Mac, there is still an incentive to buy while mortgage rates are the lowest they have been in two decades.
Over the life of a typical 30-year mortgage, a typical consumer could end up paying more in interest than in principal. With this in mind, the interest rate could have a bigger impact on what it costs to own a house than the actual price of the house does. Understanding how the various types of interest rates work, like locking in an interest rate on a loan, can help consumers find the best mortgage option that suits them.
With this in mind, some buyers are ready to jump back into the market after taking a hiatus from house shopping. According to Redfin’s Chief Economist Daryl Fairweather, it’s looking like there is less competition now than there was at the beginning of the summer. And with interest rates still so low, buyers are at a better advantage in the current market if they are interested in purchasing.
In other good news, buyers who are beginning their home journey now will have even more inventory to choose from based on the results from the Zillow research team. Zillow reported that new inventory (or homes listed for sale) rose by 30 percent from late February to late March of 2021. Agents should expect buyer interest to increase in light of the shifting market.
More Data Regarding the Real Estate Market:
Redfin conducted a study to help agents understand more about the current market conditions:
- Pending homes sales were down 12% from their 2021 peak, supporting that the market is stabilizing.
- The median home-sale price increased 18% year-over-year to $362,750 but decreased 0.2% from July 25.
- Asking prices of newly listed homes were up 12% from the same time a year ago to a median of $358,475 but down 1% from their all-time high posted June 27.
- The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, fell to 102.1% — still only slightly below the 102.3% peak set on July 4. In other words, the average home sold for 2.1% above its asking price. This measure was 3.1 percentage points higher than a year earlier.
- During July, homes for sale that had price drops hovered at 4.7%; during 2020, the rate was only 3.7%. Luckily for buyers, home prices have gone down a full percentage point.
The Real Estate Market Is Hinging on Increasing Inventory
If housing market inventory increases later this year or in early 2022, as expected, the market might only even out in some places and not others; as hot real estate markets could continue to have supply shortages for the foreseeable future.
Boise, Denver, Sacramento, and Seattle are some of the real estate markets currently experiencing a surge in demand from home buyers. As a result, inventory levels have fallen to record-low levels and could take longer to “rebound.”
In these and other red-hot housing markets, inventory levels have sunk to unprecedented lows over the past 12 to 18 months. Sellers have the upper hand in these cities, and that probably won’t change anytime soon.
But at this point, any increase in market inventory would be cause for celebration. The lopsided supply-and-demand that has been seen has created a variety of problems, including affordability issues and housing shortages.
The market looks like it is starting to stabilize since home prices have stopped dramatically climbing upward and price drops are starting to be seen more regularly on existing homes. Not only is that great news, but mortgage rates are historically low. With less competition out there for buyers, this is a great time to think about purchasing a home. As inventory increases and options become more plentiful, buyers are less willing to do anything and everything to get their offer accepted. However, not all markets are getting better; in desirable locations like Boise, Idaho, the market is still high in price and in buyer demand. As supply and demand starts to stabilize, only time will tell when the hottest markets will catch up with the expected shift.
Want To Find More Inventory?
If you are interested in finding out what real estate coaching can do for you and your business and how you can help add inventory to the market, schedule an appointment for a free business consultation with a Workman Success Systems expert analyst. When you implement Workman Success Systems’ proven strategies, real estate coaching can be the key to unlocking real growth in your business.