Ready to Sell? Today's Housing Supply Gives You Two Opportunities.
At first glance, the increase in housing supply compared to last year may not sound like good news for prospective sellers, but it actutally gives you two opportunity's in today's housing market. An article from Calculated Risk helps put the inventory gains the market has seen in 2022 into perspective by comparing it to recent years (see graph below). It shows supply has surpassed 2021 levels by 58%. But the futher back you look, the more you'll understand the bigger picture. And if you go all the way back to 2019, the last "normal" year in real estate, we're roughly 35% below the housing supply we had at that time. Opportunity #1: Take Advantage of More Options for Your Move If your current house no longer meets your needs or lacks the space and features you want, this inventory growth gives you even more opportunity to sell and move into the home of your dreams. With more houses on the market, you’ll have more to choose from when you search for your next home. Partnering with a local real estate professional can help you make sure you’re up to date on the homes available in your area. And when you do find the one, a professional can advise you on how to write a winning offer. Opportunity #2: Sell While Inventory Is Still Low Overall But again, despite the growth, inventory is still low compared to more normal years, and that isn’t going to change overnight. For you, that means your house should still be in demand among potential buyers if you price it right. As an article from realtor.com says: “Today’s shoppers generally have more homes to consider than last year’s shoppers did, but the market is still not back to pre-pandemic inventory levels.” Bottom Line If you’re a homeowner looking to sell, you have more homes to choose from and can still sell your house while inventory is low overall. Let’s connect to get started, so you can have the best of both worlds.
What's Going on With Home Prices? Here's What Experts are Saying.
If you’re thinking about buying or selling a home in the new year, you may have questions about what’s happening with home prices today as the market cools. In the simplest sense, nationally, experts don’t expect prices to come crashing down, but the level of home price moderation will depend on factors like supply and demand in each local market. That means, moving forward, home price appreciation will continue to vary by location, with more significant changes happening in overheated areas. Here’s a quick snapshot of what the experts are saying: Danielle Hale, Chief Economist at realtor.com, says: “The major question on the minds of homeowners and aspiring buyers alike is what will happen to home prices. . . Soaring prices were propelled by all-time low mortgage rates which are a thing of the past. As a result, home price growth is expected to continue slowing, dipping below its pre-pandemic average to 5.4% for 2023, as a whole.” Mark Fleming, Chief Economist at First American, says: “House price appreciation has slowed in all 50 markets we track, but the deceleration is generally more dramatic in areas that experienced the strongest peak appreciation rates.” Taylor Marr, Deputy Chief Economist at Redfin, says: “For those bearish folks eagerly awaiting the home price crash, you’ll have to keep waiting. As much as demand is pulling back supply is as well reducing downward pressure on prices in the short run.” John Paulson, Founder of Paulson & Co., says: “It’s true – housing may be a little frothy. So housing prices may come down or they may plateau . . .” What Does This Mean for You? The best way to get the answers you need is to lean on a local real estate advisor (we know a few realtors in Northern Virginia, *wink, wink*). They’ll be able to explain the latest trends in your specific market so you can make a confident and informed decision on your next step toward buying or selling a home. Bottom Line If you have questions about what’s happening with home prices today, connect with our team so you have the latest on our local market.
Buying a Home Today May Mean More Negotiation Power
Did the frequency and intensity of bidding wars over the past two years make you put your home search on hold? If so, you should know the hyper competitive market has cooled this year as buyer demand has moderated and housing supply has grown. Those two factors combined mean you may see less competition from other buyers. And like we keep saying, with less competition comes more opportunity! Here are two trends that may be the news you need to reenter the market: 1. The Return of Contingencies Over the last two years, more buyers were willing to skip important steps in the homebuying process, like the appraisal or the inspection, in hopes of gaining an advantage in a bidding war. But now, things are different. The latest data from the National Association of Realtors (NAR) shows the percentage of buyers waiving their home inspection or appraisal is down. And a recent article from realtor.com points out more sellers are accepting contingencies: “A year ago, sellers were calling all the shots and buyers were launching legendary bidding wars, waiving contingencies, and paying for homes in cash. But now, the shoe is on the other foot, and 92% of home sellers are accepting some buyer-friendly terms (frequently related to home inspections, financing, or appraisals), . . .” This doesn’t mean we’re in a buyers’ market now, but it does mean you have a bit more leverage when it comes time to negotiate with a seller. The days of feeling like you may need to waive contingencies or pay drastically over asking price to get your offer considered may be coming to a close. 2. Sellers Are More Willing To Help with Closing Costs Before the pandemic, it was a common negotiation tactic for sellers to cover some of the buyer’s closing costs to sweeten the deal. This didn’t happen as much during the peak buyer frenzy over the past two years. Today, data suggests this is making a comeback. A realtor.com survey shows 32% of sellers paid some or all of their buyer’s closing costs. This may be a negotiation tool you’ll see as you go to purchase a home. Just keep in mind, limits on closing cost credits are set by your lender and can vary by state and loan type. Work closely with your loan advisor to understand how much a seller can contribute to closing costs in your area. Bottom Line Despite the extremely competitive housing market of the past several years, today’s data suggests negotiations are starting to come back to the table. To find out how the market is shifting throughout Northern Virginia, connect with our team today!
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