Facebook
X
Pinterest
Copy Link
The shocking year-over-year number has arrived: prices are down 21%. Not to sound like a broken record, but remember the drop occurred between the April 2022 peak ($1.7M) to August 2022 ($1.35M). Since August, prices have flattened, dipped a bit in the 4th quarter, and then up 2% for 2 consecutive months in 2023. Additionally, 17% of the homes sold a median of 4% over asking, which is more than double January where 8% sold a median of 3% over asking. Curious about what February 2022 stats were? Me too, a jaw-dropping 87% of the homes sold a median of 23% (!) over asking. Those were crazy, crazy days! With 1.1 months of inventory, we are solidly in a Seller’s Market. What’s that you say? Bank failures? Buyer activity this past week didn’t appear impacted. Time will tell.
What Buyer Activity Tells Us About the Housing Market
Though the housing market is no longer experiencing the frenzy of a year ago, buyers are showing their interest in purchasing a home. According to U.S. News:
“Housing markets have cooled slightly, but demand hasn’t disappeared, and in many places remains strong largely due to the shortage of homes on the market.”
That activity can be seen in the latest ShowingTime Showing Index, which is a measure of buyers actively touring available homes (see graph below):
The 62% jump in showings from December to January is one of the largest on record. There were also more showings in January than in any other month since last May. As you can see in the graph, it’s normal for showings to increase early in the year, but the jump this January was larger than usual, and a lot of that has to do with mortgage rates. Michael Lane, VP of Sales and Industry at ShowingTime+, explains:
“It’s typical to see a seasonal increase in home showings in January as buyers get ready for the spring market, but a larger increase than any January before after last year’s rapid cooldown is significant. Mortgage rate activity this spring will play a big role in sales activity, but January’s home showings are a positive sign that buyers are getting back out there . . .”
It’s important to note that mortgage rates hovered in the low 6% range in January, which played a role in the high number of showings. What does this mean? When mortgage rates eased, buyer interest climbed. The jump in home showings early this year makes one thing clear – while rates may be volatile right now, there are interested buyers out there, and when mortgage rates are favorable, they’re ready to make their move.
An Expert Makes All the Difference When You Sell Your House
If you’re thinking of selling your house, it’s important to work with someone who understands how the market is changing and what it means for you. Here are five reasons working with a professional can ensure you’ll get the most out of your sale.
1. They’re Experts on Market Trends
With today’s housing market defined by change, it’s critical to work with someone who knows the latest information and how it impacts your goals. An expert real estate advisor knows about national trends and your local area too. More importantly, they’ll give insight to what all of this means for you, so they’ll be able to help you make a decision based on trustworthy, data-bound information.
2. A Local Professional Knows How To Set the Right Price for Your Home
Home price appreciation has moderated this year. If you sell your house on your own, you may be more likely to overshoot your asking price because you’re not as aware of where prices are today. Pricing your house too high can deter buyers or cause your house to sit on the market for longer.
Real estate professionals look at a variety of factors, like the condition of your home and any upgrades you’ve made, with an unbiased eye. They compare your house to recently sold homes in your area to find the best price for today’s market so your house sells quickly.
3. A Real Estate Advisor Helps Maximize Your Pool of Buyers
Since buyer demand has cooled this year, you’ll want to do what you can to help bring in more buyers. Real estate professionals have a wide range of tools at their disposal, such as social media followers, agency resources, and the Multiple Listing Service (MLS), to ensure your house gets in front of people looking to make a purchase. Investopedia explains why it’s risky to sell on your own without the network an agent provides:
“You don’t have relationships with clients, other agents, or a real estate agency to bring the largest pool of potential buyers to your home.”
Without access to your agent’s tools and marketing expertise, your buyer pool – and your home’s selling potential – is limited.
4. A Real Estate Expert Will Read – and Understand – the Fine Print
Today, more disclosures and regulations are mandatory when selling a house. That means the number of legal documents you’ll need to juggle is growing. The National Association of Realtors (NAR) puts it like this:
“There’s a lot of jargon involved in a real estate transaction; you want to work with a professional who can speak the language.”
5. A Local Professional Is a Skilled Negotiator
In today’s market, buyers are regaining some negotiation power. If you sell without an expert, you’ll be responsible for any back-and-forth. That means you’ll have to coordinate with:
- The buyer, who wants the best deal possible
- The buyer’s agent, who will use their expertise to advocate for the buyer
- The inspection company, which works for the buyer and will almost always find concerns with the house
- The appraiser, who assesses the property’s value to protect the lender
Instead of going toe-to-toe with these parties alone, lean on an expert. They’ll know what levers to pull, how to address everyone’s concerns, and when you may want to get a second opinion.
Bottom Line
Don’t go at it alone. If you’re planning to sell your house this spring, let’s connect so you have an expert by your side to guide you in today’s market.
Checklist for Selling Your House This Spring
Some Highlights
- As you get ready to sell your house, there are specific things you can add to your to-do list.
- These include decluttering, taking down personal photos and items, and power washing outdoor surfaces.
- Let’s connect so you have advice on what you may want to do to get your house ready to sell this season.
The Two Big Issues the Housing Market’s Facing Right Now
The Two Big Issues the Housing Market’s Facing Right Now
The biggest challenge the housing market’s facing is how few homes there are for sale. Mark Fleming, Chief Economist at First American, explains the root causes of today’s low supply:
“Two dynamics are keeping existing-home inventory historically low – rate-locked existing homeowners and the fear of not finding something to buy.”
Let’s break down these two big issues in today’s housing market.
Rate-Locked Homeowners
According to the Federal Housing Finance Agency (FHFA), the average interest rate for current homeowners with mortgages is less than 4% (see graph below):
But today, the typical mortgage rate offered to buyers is over 6%. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as being rate locked.
When so many homeowners are rate locked and reluctant to sell, it’s a challenge for a housing market that needs more inventory. However, experts project mortgage rates will gradually fall this year, and that could mean more people will be willing to move as that happens.
The Fear of Not Finding Something To Buy
The other factor holding back potential sellers is the fear of not finding another home to buy if they move. Worrying about where they’ll go has left many on the sidelines as they wait for more homes to come to the market. That’s why, if you’re on the fence about selling, it’s important to consider all your options. That includes newly built homes, especially right now when builders are offering concessions like mortgage rate buydowns.
What Does This Mean for You?
These two issues are keeping the supply of homes for sale lower than pre-pandemic levels. But if you want to sell your house, today’s market is a sweet spot that can work to your advantage.
Be sure to work with a local real estate professional to explore the options you have right now, which could include leveraging your current home equity. According to ATTOM:
“. . . 48 percent of mortgaged residential properties in the United States were considered equity-rich in the fourth quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than 50 percent of their estimated market values.”
This could make a major difference when you move. Work with a local real estate expert to learn how putting your equity to work can keep the cost of your next home down.
Bottom Line
Rate-locked homeowners and the fear of not finding something to buy are keeping housing inventory low across the country. But as mortgage rates start to come down this year and homeowners explore all their options, we should expect more homes to come to the market.
