Why It’s Still a Sellers Market
The real estate market is finally cooling off from the peak frenzy it saw during the pandemic. If you’re thinking of making a move, you should know the market is still anything but normal.
The supply of homes for sale has been growing this year,but there’s still a shortage of homes on the market. And that means conditions continue to favor today’s sellers. That’s because the level of inventory of homes for sale can help determine if buyers or sellers are in the driver’s seat. Think of it like this:
A buyers’ market is when there are more available homes for sale than buyers looking to buy. When that happens, buyers have the negotiation power because sellers are more willing to compromise so they can sell their house.
In a sellers’ market, it’s just the opposite. There are a low supply of homes available for the number of buyers in the market and that gives the seller all the leverage. In that situation, buyers will do what they can to compete for the limited number of homes for sale.
A neutral market is when home supply is balanced and there are enough homes to meet buyer demand at the current sales pace.
And for the past two years, we’ve been in a red-hot sellers’ market because inventory has been near record lows. The blue section of this graph highlights just how far below a neutral market inventory still is today.
What Does This Mean for You?
Ed Pinto, Director of the American Enterprise Institute’s Housing Center, gives a summary of what’s happening in today’s market:
“Overall, the best summary is that we'll move from a gangbuster sellers' market to a modest sellers' market.”
While buyer demand is softening due to higher mortgage rates, homes that are priced right are still selling fast. That means your window of opportunity to list your house hasn’t closed.
Bottom Line
Today’s market conditions are still in the Seller’s favour even though the market is cooling. When you’re ready to sell your house, let’s connect so you can start plans about your moves.