If the Home Market is “Normalizing”, Where Does that Leave You?
When it comes to the housing, you are in one of three places – looking to buy, looking to sell or in a home and satisfied with your current conditions. No matter where you are in that list of options, you are likely more than aware of the volatility of the market over the last decade and what it has meant to you and your housing plans.
We have reported the continued stabilization of the market for quite a while now, and, logically, consistent stabilization leads to normalization, right? That’s where we are with the home market. While “normal” seems like a positive word, and can be construed as such for most people, it also references “normal” as in “ business as usual”, which changes some of the recent criteria anyone in the buying or selling positions can rely on. How does the potential of a “normal” housing market effect sellers and buyers?
Housing Listing Supply is on the Rise
We have noted on several occasions that a consistently low inventory of homes for sale put the advantage to the sellers for the last few years. The latest Existing Home Sale Report from The National Association of Realtors notes that over the last two months, there has been an increase in inventory. This shift brings an end to a 37-month long streak of declining numbers of homes listed. Consecutively, there have been more building permits listed meaning new construction is on an uptick.
More supply means more choices for home buyers, decreasing the advantage for sellers.
Buyer Demand is Decreasing
In the latest “Z” report, Ivy Zelman notes, “While we continue to expect a resumption of growth in resale transactions on the back of easing inventory in 2019 and 2020, our real-time view into the market through our Real Estate Broker Survey does suggest that buyers have grown more discerning of late and a level of “pause” has taken hold in many large housing markets.
Indicative of this, our broker contacts rated buyer demand at 69 on a 0- 100 scale, still above average but down from 74 last year and representing the largest year-over-year decline in the two-year history of our survey.”
So, if you’re looking to sell your home, it’s not exactly Defcon 1 yet, but increasing inventory and decreases in buyer demand are signs that action is prudent sooner than later to take advantage of the lingering chance to sell your home now before the numbers shift further back to center “norms”.
For potential home buyers, less competition from other buyers means more homes available for you to consider in your home search.
Home Values Continue to Increase
Overall, national home prices have increased 6.2% year-over-year, with lower prices home seeing larger increases on average and the highest priced homes seeing the least value uptick.
So, let’s look at the stats. Increased home values, decreasing buyer demand and increased inventory. We’re on the teetering edge of a normal housing market, meaning action for anyone looking to buy or sell a home is prudent now. Take advantage of lower prices, less competition and the fringe buyer behaviors now before they’re stabilized and gone.