Despite the historically high home prices of the last two years, many potential sellers waited rather than putting their homes on the market. So now the time has come where sellers will begin to see a less-than-stellar sale price.
As builders complete more new homes, buyers are less likely to offer top dollar for a resale home, and we are seeing many more residential properties go on the market, with lots more competition, even in the same neighborhood. For the first time in many months, the inventory is larger than the pool of buyers.
More Homes and Less Buyers
The average number of days on the market continues to increase. Multiple offers on the same home are decreasing rapidly and buyers are expecting some concessions from sellers in addition to lower prices, such as contribution to closing costs, a home warranty, or other incentives. It seems the seller’s market has shifted to the buyers.
Another factor slowing sales is the rising rates for mortgages, even though they have stabilized somewhat. Both buyers and sellers are concerned about the effects of inflation and worry about the economy in general. Mortgage rates are predicted to increase throughout the remainder of the year, so the uncertainty of the economic future is holding back some would-be buyers.
Real Estate Cycles
Real estate markets go in cycles and whether buying or selling, it is important to know what is the current one. If buying, it is better to wait until there are more choices with a higher inventory; if selling, it is best when inventory is low and prices can be higher. So, for those sellers who waited too long, it might be best to wait it out. But buyers, get out there because you might find some good homes at better prices!