What Lies Ahead For Home Sellers

I think it’s safe to say that these past few years have created a lot of wealth for most homeowners, unlike anything we’ve ever experienced. But, home sales have been trending downward since this time last year.

This infographic from the National Association of Realtors shows the decline year over year to be 8.6%. And the inventory is on the rise, now sitting at 2.6 months in June. That’s a substantial difference from just a few months ago.

Due to escalating home prices and mortgage rates, buyers have postponed their homeownership dreams and stepped out of the market for now. That doesn’t mean sales are non-existent—it just means the bidding war season is kaput. 

The pandemic spurred homebuying to record levels, it inspired people to move. Maybe it was because we all had to spend so much time inside our homes that we were forced to take a more critical look at our accommodations. 

Whatever the reasons, people suddenly became dissatisfied with their current living situation. In 2021, the demand stayed well above prepandemic levels. And as we round out the first half of 2022, that demand hasn’t come down. 

But things could be looking up for homebuyers, there is a blast of hope.

From everything we’ve seen, the attempts to rein in consumer demand are working. Bidding wars are less of a thing, homes are spending more time on the MLS, and showings are dropping off. 
As demand slows, as it looks like it is, price escalation is slowing. That’s great news for buyers. Less bidding wars mean buyers will have stronger bargaining power.

But for home owners slow appreciation is still appreciation.

Home prices are de-escalating, the demand is cooling, and the market is showing signs of a return to something closer to normal. But it’s not doom and gloom.

The bottom line is homeowners will still come out ahead compared to those who continue to rent. The sooner a person invests in real estate, the sooner they can start their equity growth. Appreciation at a slower, more realistic rate, is still appreciation. 

We’ve come to expect huge appreciation gains over the past few years. But honestly, that was just a magical, once-in-a-generation shift fueled by mass need changes during a once-in-a-generation pandemic. What is coming is a return to normal.

And first-time homebuyers will be able to re-enter the market with a much better shot at finding, and winning, their first home. Buyers won’t have to put 20 offers in just to win one.
Facebook
LinkedIn

Leave a Reply

Your email address will not be published.


More
articles