Getting a house market ready is a step by step process. It takes active participation from agent and owner(s). One of the most valuable insights an agent should bring to a seller is what to expect . Have you debated about selling? Take it one step at a time.
A Historic Rebound for the Housing Market
Pending Home Sales increased by 44.3% in May, registering the highest month-over-month gain in the index since the National Association of Realtors (NAR) started tracking this metric in January 2001. So, what exactly are pending home sales, and why is this rebound so important?
According to NAR, the Pending Home Sales Index (PHS) is:
“A leading indicator of housing activity, measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos, and co-ops. Because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing-Home Sales by a month or two.”
In real estate, pending home sales is a key indicator in determining the strength of the housing market. As mentioned before, it measures how many existing homes went into contract in a specific month. When a buyer goes through the steps to purchase a home, the final one is the closing. On average, that happens about two months after the contract is signed, depending on how fast or slow the process takes in each state.
Why is this rebound important?
With the COVID-19 pandemic and a shutdown of the economy, we saw a steep two-month decline in the number of houses that went into contract. In May, however, that number increased dramatically (See graph below):This jump means buyers are back in the market and purchasing homes right now. Lawrence Yun, Chief Economist at NAR mentioned:
“This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership…This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”
But in order to continue with this trend, we need more houses for sale on the market. Yun continues to say:
“More listings are continuously appearing as the economy reopens, helping with inventory choices…Still, more home construction is needed to counter the persistent underproduction of homes over the past decade.”
As we move through the year, we’ll see an increase in the number of houses being built. This will help combat a small portion of the inventory deficit. The lack of overall inventory, however, is still a challenge, and it is creating an opportunity for homeowners who are ready to sell. As the graph below shows, during the last 12 months, the supply of homes for sale has been decreasing year-over-year and is not keeping up with the demand from homebuyers.
If you decided not to sell this spring due to the health crisis, maybe it’s time to jump back into the market while buyers are actively looking for homes. Let’s connect today to determine your best move forward.
The current real estate environment poses a great opportunity for sellers and buyers. Timing couldn’t be better for both.
- Demand for housing is high
- Supply/Inventory is low, below what experts consider balanced
- Interest rates are historically low
In this market sellers earn top value for their home and buyers experience greater buying power and increased affordability.
- The Mid Atlantic Region to include DC, VA, MD, parts of WV, PA and DE housing Months of Supply is 2, well below the 4 to 6 months which is generally considered a balanced market.
- The impact your interest rate has on your monthly mortgage payment is significant. An increase of just $20 dollars in your monthly payment can add up to $240 per year or $7,200 over the life of your loan. Maybe it’s time to lock in now while rates are still low.
- How can you take advantage of this market? Don’t wait and see, connect with a RE professional and make a plan.
SOLD: #TheCarleton – 4550 N Park Ave 907 #ChevyChaseRealEstate
As the article published in Inman suggests, there are more that a few ways a buyer can sabotage their own home purchase.
Buyers sometimes can potentially sabotage a home purchase? Some factors to be aware of…: – You can read the full article here
- Having unrealistic expectations – Balancing market realities with the price point that they can afford is important.
- Hesitating – There is often a short window to pull the trigger when buyers come across “the one,” especially if it has just hit the market.
- Making low-ball offers -Buyers risk alienating the seller, leaving the door open for other offers and, perhaps, losing out on what they want.
- Being inflexible – The ability to adapt and function from a position of give-and-take is a must.
My clients illustrate success when one is realistic, stays within budget, is ready and willing to act quickly, then can make an offer based on market conditions and information shared about the seller’s priorities. Such clients were able to close on exactly what they were searching for without compromise. ….and $50,000 below asking price.