Realtor.com: Home sellers may continue to hold the upper hand, but buyers may be more sensitive to price increases; and more inventory could enter the market.
SANTA CLARA, Calif. – Home sellers will likely continue to hold the upper hand this spring, says a realtor.com® housing report that also uncovered upcoming trends.
Buyers are likely to become more sensitive to price increases. Mortgage rates are on the rise and are expected to continue to increase this year. As home shoppers face higher borrowing costs, they may need to tighten their budgets or even step back from the market as home prices increase as well. That could help to moderate price trends, realtor.com says. The trend occurred last year, even when mortgage rates were at historical lows but home prices were climbing by double-digit annual gains. In early May 2021, the number of sellers who made price adjustments rose by 17.8% compared to the start of the year.
More inventory will likely hit the market. Buyers may see the benefit of a greater housing supply. Still, the number of homes for sale is expected to remain historically low this year, though more options are likely to become available. Builders are adding more homes to the inventory. Also, more homes typically come on the market during the spring season. Realtor.com notes that based on historical trends, by mid-August the number of sellers with actively listed homes usually rises 17.4% over the beginning of the year. If that trend holds true, it could mean more options for buyers and more competition for home sellers.
Sellers may face trade-offs. Homeowners who have to sell and buy could face a dilemma: If they hold out for peak asking prices on their home, they also could end up paying a premium for the home they buy, realtor.com says. Listing prices usually reach their highest levels in the summer. But home seller-buyers who delay will face more competition from other sellers and the possibility of missing out on buying opportunities.
“We all know that homes are selling lightning-fast right now,” says Rachel Stults, managing editor at realtor.com. “But that doesn’t necessarily mean your house will sell itself. Before you list your home this spring – or any other time this year – make sure you’ve taken steps to get it ready, including cleaning and decluttering, getting cost estimates on repairs you might need to make, and talking to agents to see who would be a good fit for your needs. No matter when you decide to list, whipping your home into shape beforehand will help you sell faster and for more money.”
Source: Realtor.com
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I have been hearing it nonstop, "Do I buy now so I can take advantage of selling my house for top dollar or wait?" Quite frankly, it's a really difficult question to answer, and each real estate agent will have a different piece of advice for you. In my opinion, it really depends on your situation which I understand is not what everyone wants to hear. For example, if you have outgrown your current home and are looking to upgrade and your new home will be at least a 10+ year home, in my opinion, selling and buying now is a good option. Yes, you will be buying at a premium but you are also selling at a premium. Also, since you plan on staying there for at least 10 years, you likely won't find yourself in a short sale situation. Wait, short sale? Why are you talking about a short sale? Let me explain. The real estate market is like the stock market in that it has peaks and valleys. Everything that goes up must come down. That means that this hot seller's market is going to level off at some point. Nobody knows when that will be but it's safe to say it will likely be in the next 2-3 years. That means if you buy now and pay above value, in 2-3 years' time, the value of your home will likely not increase. In fact, it could even be lower than what you paid for it. If you wanted to sell and make a profit, you will likely have to wait a much longer time in order to have any ROI (return on investment). If you have to sell after only a couple of years, for whatever reason, and the value of your home is less than the amount left on your mortgage, you will find yourself in a short sale situation. Again, nobody knows what the future will bring or what could happen that will impact the market. This is going on statistics and the basic principle that the market will level out and we will go through a time period when it's a buyer's market. Some predict the mortgage rates will increase dramatically over the next couple of months and others say it will be a slow progression over several months. If you are still contemplating buying, my advice is to get preapproved now so you can lock in a lower rate. Preapprovals are generally good for 60-90 days so you will have some time after getting preapproved to weigh your options. Still unsure what to do? Send me a message on my 'Contact Me Page' and let's #seewhatschucando4you.
