If you’ve been following the housing market lately, you know for quite some time, it’s been a seller’s market. This may be changing as the number of homes for sale is on the rise, positioning us in more of a balanced market.
A balanced market is typically characterized by a supply of homes that can satisfy demand for about five to seven months. There is no particular advantage to being a buyer or a seller. For the past five years or so, sellers have had the upper hand. A balanced market would be a welcome change for prospective buyers. So, are we actually moving toward such a market?
At the start of the year, the national housing market had a three-month supply of homes. It has since gone up to four months. While this might not seem like a significant shift, it does point to the fact that the market is edging closer to balance, even though it hasn’t quite reached that point yet. It’s also worth noting that this increase in inventory won’t lead to a market crash from an oversupply of homes for sale. Even with the recent growth, the supply remains insufficient to trigger such a downturn.
This chart illustrates where inventory has been in the past, and where it’s headed today!
For now, we’re still in a seller’s market, but it’s less intense than it has been over the past few years. Here are some examples as to why:
- Homes Are Staying on the Market Longer: With more homes available, they’re not selling as quickly as before. Buyers now have more time to find the right property. For sellers, pricing your home correctly is crucial to attract buyers; otherwise, they may opt for better-priced alternatives.
- Sellers Are Receiving Fewer Multiple Offers: Sellers may need to be more flexible with pricing or terms to close a deal. Buyers, on the other hand, might experience less competition and have more choices.
- Fewer Buyers Are Waiving Inspections: With increased negotiating power, buyers are less likely to waive inspections. Sellers should be prepared to negotiate and address repair requests to keep the sale on track.
Whether you’re buying or selling, understanding these national trends can give you a significant advantage.
As a footnote:
Thanks to Keeping Current Matters for contributing to this article.