Home Inventory

Why Does It Still Feel Like a Seller’s Market?

By Kerry Smith

RE usually sees cycles between buyer’s and seller’s markets, but this time it’s a bit different. Supply vs. demand hasn’t changed because both sides pulled back.

SEATTLE – New listings fell 21.8% year-to-year during the four weeks ending April 2, one of the biggest drops since the start of the pandemic, according to a Redfin study.

An increasing number of homeowners don’t want to move because they still have generational-low mortgage rates secured only a few years ago. While rates have fallen for four weeks in a row, according to this week’s report, they’re still about twice as high as they were before 2021.

As a result, buyers unafraid of current mortgage rates quickly scoop up new listings. Of homes going under contract, nearly half are doing so within two weeks; at the beginning of 2023, it was about 25%.

“Elevated mortgage rates are perhaps an even bigger deterrent for would-be sellers than for would-be buyers,” says Redfin Deputy Chief Economist Taylor Marr. “Giving up a 3% mortgage rate for one in the 6% range is a tough pill to swallow. Today’s serious homebuyers have grown accustomed to the idea of a 5% or 6% rate and have adjusted their budgets accordingly.”

“Shiny new listings are getting multiple offers and selling fast. The caveat is that they have to be priced correctly from the beginning,” says Denver Redfin agent Stephanie Collins. “One of my buyers recently made an offer on a move-in ready home in a popular area. The home was priced right in line with the market at $520,000; it received eight offers and went for $560,000 to a competing buyer.”

Florida ranks near top for rising home prices

In cities where buyer demand outpaces seller supply, home prices continue to go up – and Florida is home to three of the top five U.S. cities for price increases.

While Milwaukee led the nation for price increases (up 11.4% year-to-year), Fort Lauderdale came in second (up 8.9%), followed by West Palm Beach (up 8.2%), Miami (up 7.9%) and Columbus, Ohio (up 6.3%).

On the flipside, the top five price declines in the U.S. were largely on the West Coast: Home prices dropped in 28 of the U.S.’s 50 most populous metros, with the biggest drop in Austin, Texas (down 14.7% year-to-year), Sacramento (down 11.7%), Oakland, California (down 10.4%), San Jose (down 10.2%) and Seattle (down 9.6%).

Leave a comment December 4, 2021 LaurelMurphyRE

By Clare Trapasso
Dec 1, 2021

1 of a 3 part series
Highlights:

Prices will stay high, inventory will remain tight, and mortgage rates will rise
Prices aren’t anticipated to come down from the highs
“The pace of price growth is going to slow notably, bringing it more in line with buyers’ incomes”

Here’s what we already know: Since the COVID-19 pandemic began, the real estate market has been on a wild ride of unprecedented highs and lows—record-high home prices on one side, record-low mortgage rates and available homes for sale on the other. It’s been a time of overwhelming stress for many, gigantic profits for some, and great disorientation for most of us.

Now the housing experts say the market is “normalizing.” But what does that mean? Will home prices and rents finally come down? Will more homes go up for sale? And what does the year ahead have in store for the real estate market?

The Realtor.com® 2022 housing forecast anticipates the market will continue slowing down from the frenzy seen in the spring when prices shot up to new heights. However, prices will stay high, inventory will remain tight, and mortgage rates will rise.

The bottom line: Even as the market calms down further, it’s still expected to be challenging for buyers, especially those purchasing their first homes.

“The 2022 housing market will continue to be a seller’s market with fast-moving homes and rising prices,” says Realtor.com Chief Economist Danielle Hale. “But the competition should be a bit less intense than we’ve seen recently.”

Home prices will stay high, but price growth will continue slowing

Home prices aren’t expected to keep zooming up into the stratosphere in 2022 the way they did this year. So buyers can breathe at least a shallow sigh of relief. Instead, Realtor.com economists anticipate they’ll increase at a much slower rate of just 2.9% over this year compared with an anticipated 12% rise in 2021.

This means the double-digit price growth that confounded buyers earlier this year is expected to taper off.

However, prices aren’t anticipated to come down from the highs they reached this year due to the continuing shortage of properties for sale and hordes of buyers continuing to enter the market. They just won’t go up so much as quickly.

“Price growth is expected to move back toward a normal range, but this is on top of recent high prices,” says Hale. “So prices will [still] hit new highs.”

While that’s not great news for buyers, homes aren’t expected to cost much more than they did just a few months ago.

“The pace of price growth is going to slow notably, bringing it more in line with buyers’ incomes,” says Hale. “With prices high and mortgage rates beginning to tick up, people won’t be able to be as aggressive in what they’re willing to pay.”