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By now, you may have noticed a shift in the housing market. But is it still a “buyers market”? It depends on who you ask, and more importantly, where they are located.
At its core, real estate is a local game. Certain generalizations can be made about the housing market as a whole, but when it comes to calling things buyers, sellers, or win-win, e.g. for a taken market), it depends. About the unique supply and demand factors of a particular region.
take Manhattan. According to a recent report from real estate analytics provider UrbanDigs, the ward’s housing market has officially “started in late 2020 as he entered buyer’s market territory for the first time since early 2021.” Supply increased, demand dropped significantly, and pending sales fell to he 2019 levels.
Meanwhile, Fayetteville, North Carolina remains a “seller’s hub,” according to homeownership platform Knock.com. Homes were sold there in just seven days on average, and about 1,200 homes were sold in August.
Realtor.com Chief Economist Danielle Hale said: “Some of the most competitive markets have reversed direction and are seeing the biggest corrections.”
She is right. Many of the pandemic’s hottest markets, including Salt Lake City, Phoenix and Boise, are now among the most lucrative markets for buyers, a huge change from just a few months ago, according to Knock data. .
Despite these outliers, the definitive “buyer’s market” list is pretty scarce at the moment, but that doesn’t mean things aren’t going to change. How can you tell if the balance has tipped in your area? Pros say there are some signs to look out for.
Signs of a buyer’s market
Anyone who has bought a home in the last few years knows what the seller’s market is like. Very few lists. Homes sell at lightning speed. And even if you find a great location, you’re going to face a lot of other buyers.
A buyer’s market is just the opposite. Instead, supply outstrips demand, giving home shoppers the upper hand, both when searching for homes and when negotiating.
“One of the main metrics is inventory, the number of homes currently on the market,” says Christine Hansen, broker owner of CENTURY 21 Hansen Realty in Fort Lauderdale, Florida.
Look to San Francisco — the top buyer’s market in the country, according to Knock.com — for a good example. There, the number of active listings hovers around 6,000 per month. at the beginning of the year? About 2,000 homes were put up for sale.
Homie Colorado real estate agent Greg Hriso says there are other signs you can look for.
“Sellers offer more incentives such as: [contributing to buyers’] We have reduced closing costs and are open to more contingencies than before,” he said. He added, “Houses take a long time to sell, [price] Ratings may slow down or even drop a bit. ”
Again, San Francisco is a great example. In August, it took him 24 days for a typical San Fran home to go on sale. That’s double his time last year. House prices have also fallen steadily since May, and are currently down 5% compared to his August last year.
If you haven’t seen a similar event in your market yet, don’t worry. Pros say the transition from a seller’s market to a buyer’s market is usually gradual. Things change gradually and eventually the market reverses.
As Hansen explains, “There’s a lag between the seller’s market and the buyer’s market. It’s like catching up.”
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Buyers are doing better than they were months ago
Luckily, even if it’s not in the buyer’s favor yet, there should be a few things that ease the pressure on home shoppers, at least compared to a few months ago.
For one thing, rising mortgage rates (which have made them much less affordable in recent months) are weakening competition almost everywhere.
“The rapid rise in interest rates has led to a sharp drop in the number of potential homebuyers,” said Christine Delitis, deputy chief economist at Moody’s Analytics. We can expect less competition.”
This is great if you’re still looking for a home, as it means less bidding wars and heated negotiations. You probably don’t need to put up a price or waive major contingencies so that you can cancel due to home inspection results, a low valuation, or loan defaults.
“The demand frenzy we saw in the first two quarters of 2022 is no more,” says Coldwell Banker Warburg agent Karen Kostiw. “Sellers are no longer requiring buyers to remove contingency clauses from contracts.”
There’s also an overall slowdown that tends to occur every fall, says Hale. Buyers typically turn back when the holidays approach or sign the next lease (October marks the end of his peak rental season). Homes also stay on the market longer, making the seller more motivated than he is at other times of the year.
“While the market remains relatively competitive this year, it’s coming out of the most intense conditions we’ve seen in 2021 and moving in a more buyer-friendly direction,” Hale said. It means that seasonal holidays in the fall are especially useful.”
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Strategies for buying now
Buyers shopping in today’s changing market may have more influence than ever before, but conditions aren’t perfect. Fortunately, agents can help ensure your success. He says there are several strategies.
First, don’t feel pressured to make decisions right away. However, act with a certain degree of urgency. Bidding wars are no longer the norm in most regions, but you can still expect to face competition.
“We’ve found that as soon as one person shows interest, another person will come out of the wing and make an offer,” says Allison Timothy, an agent at Homie Utah. “I always advise buyers to assume there are other eyes on real estate, regardless of what the general market looks like.”
You can make more demands than you did months ago, like including contingencies or asking sellers to cover closing costs. Today he can even ask sellers to lower interest rates if near 7% mortgage rates are straining his budget. Basically, you make a lump sum payment to the lender and lower interest rates (and payments) for the first few years. number of years on the loan.
Don’t expect to have it all. At least it’s easy to get. As DeRitis puts it, “Don’t necessarily expect your offer to be accepted immediately.”
Finally, if you’re on the sidelines hoping prices will drop significantly, don’t wait too long.
“Housing in good condition continues to be in demand,” says Kostiw. “Prices are falling in certain price bands and regions, but no knife will fall.”
Want to become a homeowner? AmeriSave Mortgage can help!
With mortgage rates rising, the sooner you consider your next move, the better. Click below to get started today.
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Details from money:
Why the Fall Home Market Isn’t Good for Buyers or Sellers
5 reasons home sales keep failing and how sellers can prevent it
Home sellers are slashing list prices at record high rates
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