There’s no sugarcoating it. This is a crazy time for real estate. The imbalance of supply and demand is becoming equally frustrating for buyers and sellers as home values appreciate and bidding wars become a necessary evil to the homebuying process. The good news is: the summer market is heating up, and seller confidence is rising as quickly as the temperatures.
Here are the biggest points for buyers and sellers to know to help keep their hopes up and their heads cool.
Buyer fatigue is very real…but there’s hope on the horizon
- The combination of low inventory and high demand is creating an environment where buyers are getting into bidding wars with nearly every home that hits the market. According to NAR, the average amount of offers a listed home receives is currently around 4.8. Buyers who have been at this for a couple of months or longer are probably feeling a little frustrated and discouraged right now.
- The Good News: Experts are projecting a rise in inventory in the 2nd half of the year, and builder confidence in the market remains strong from the lack of resale inventory.
Experts say sell now, not later.
- On the flip side of buyer fatigue, we have seller apprehension. While low mortgage rates continue to fuel high buyer demand, there isn’t enough inventory to go around. If there’s ever been a seller’s market, it’s right now.
- What this means for sellers: With homeowners in the driver’s seat, they have everything to gain and nothing to lose. With offers per listed home at almost 5 and the average amount of days on the market currently at 18, sellers can expect a swift and painless process.
“For most sellers, listing sooner rather than later could really pay off with less competition from other sellers and potentially a higher sales price,” said Danielle Hale, chief economist at realtor.com.
- With the possibility of higher mortgage rates and a surge in new construction coming to market later this year, putting off selling means risking missing out on more interest and a higher sale price for their house.
There’s a really big benefit to price appreciation
- There’s been a media storm of speculation about where skyrocketing home price appreciation has the real estate market headed. Naturally, both buyers and sellers are wary of making a move in such a hot market. But, as home values continue to rise, so does one of the most important pieces of the homeownership puzzle – equity.
- What this means for buyers: If you are hesitant to buy at the “top of the market,” don’t worry, it’s not the top. While experts are predicting a natural slowdown in price appreciation as inventory rises, home values are projected to continue to rise over the next 5 years. No bubble. No crash. Here is a graph to show you the predicted rates.
Source: Keeping Current Matters – www.keepingcurrentmatters.com/article/summer-market