If you’re weighing your options, remember that owning a home is a decision that has considerable financial perks. If you want to learn more, let’s connect to talk about the perks of homeownership.
Almost every industry is currently struggling with supply chain disruptions. This also applies to the current U.S. housing market, where buyer demand far exceeds housing supply.
Purchaser demand is very strong right now. The National Association of Realtors (NAR) just released their latest Existing Home Sales Report which reveals that sales surged in January. Existing home sales rose to a seasonally adjusted annual rate of 6.5 million – an increase of 6.7% from the prior month, with sales up in all regions. However, there’s one big challenge.
Inventory Is at an All-Time Low
Because purchaser demand is so high, the market is running out of available homes for sale. The above-mentioned report states that the current months’ supply of inventory of homes for sale has fallen to 1.6 months. This prompts Lawrence Yun, Chief Economist at NAR, to say:
“The inventory of homes on the market remains woefully depleted, and in fact is currentlyat an all-time low.”
Earlier this month, realtor.com released their inventory data for January. It helps confirm this point. Here’s a graph comparing inventory levels for January over the last six years:
As the graph shows, new listings coming on the market have decreased over the last four years (shown in blue in the graph). The graph also reveals that carry-over inventory has plummeted in recent years. This is because listings are now sold so quickly, they don’t stay on the market long enough to carry over month-to-month (shown in green in the graph). In other words, homes are not staying on the market for months as they had prior to the pandemic. In the report mentioned above, NAR reveals that:
“Seventy-nine percent of homes sold in January 2022 were on the market for less than a month.”
Odeta Kushi, Deputy Chief Economist at First American, explains it like this:
“A higher velocity of sales (lower [Days on Market]) helps to explain a housing market characterized by both higher sales & lower inventory. Many resale transactions are happening so quickly that they ‘flow’ in & then out of the ‘stock’ between the fixed monthly measurement of inventory.”
What Does This Mean for Sellers?
Anyone thinking of putting their home on the market shouldn’t wait. A seller will always negotiate the best deal when demand is high and supply is limited. That’s exactly the situation in the real estate market today.
Later this year, inventory (and by extension, your competition) will increase as many homeowners are waiting to put their homes on the market in the spring and early summer.
In addition, Len Kiefer, Deputy Chief Economist at Freddie Mac, says:
“Housing starts start off 2022 strong, just edging out 2021 for most in January since 2006.”
As these newly built homes are completed, they will also become competition for your house. This gives you a tremendous opportunity right now. Don’t wait for that increase in competition in your area. If you want to sell in 2022 and are ready to start the process, today is the day to list your house.
Bottom Line
If you’re ready to sell, let’s connect to get your house on the market while today’s inventory situation is in your favor.
In today’s housing market, there are far more buyers looking for homes than sellers listing their houses. Based on the concept of supply and demand, this means home prices will naturally rise. Why is that? When there are more people trying to buy an item than there are making that item available for sale, that drives prices up. And that’s exactly the case in today’s housing market. So, knowing what’s happening with the inventory of homes for sale and the demand for housing is crucial for today’s buyers and sellers.
Nationally, Demand Is High and Supply Is Very Low
The latest buyer and seller activity data from the National Association of Realtors (NAR) indicates buyer traffic heavily outweighs seller traffic today, as shown in the maps below. There are far darker blues (strong buyer activity) on the left and much lighter blues (weak seller activity) on the right. In other words, this shows how the demand for homes is significantly greater than what’s available to purchase.
What Does This Mean if You’re a Seller?
Supply is struggling to keep pace with demand. In fact, the inventory of homes for sale recently hit an all-time low. That gives you an incredible advantage when you sell your house. With so few listings, it’s likely more potential buyers will view your house – especially if you work with an agent to price it right. That means there’s a high chance you’ll receive multiple offers or buyers will enter a bidding war for your house. And that dynamic can drive the sale price of your home up.
What Does This Mean if You’re a Buyer?
As a buyer with fewer options available, you’re likely to see more competition, so you need to be strategic to win. First, make sure you have a trusted professional on your side. Your real estate agent will help you understand your local market and work with you to act quickly when the time is right. Even when it’s challenging to find a home, you can still succeed as a buyer today if you have a trusted advisor on your side every step of the way.
Bottom Line
Whether you’re a homebuyer, seller, or both, knowledge truly is power. Let’s connect today so you can better understand what’s happening in our local market and achieve your homebuying and selling goals this year.
Many things have changed over the past couple of years, and real estate is no exception. One impact is an increased desire to own more than one home. According to the recent Luxury Market Report from Luxury Home Marketing:
“As trends such as remote working and flexi-hours took hold in 2021, so too did the flexibility of relocating as well as the growth of second homeownership.”
This may be because the pandemic has altered how we think about our homes. Where we live has become, more than ever, our safe space and our getaway. And with the rise in remote work, more people are reconsidering where they want to live and buying second homes to give them greater flexibility. If you fall in that category, here are just a few of the perks you’ll enjoy, and how owning a second home may be a great decision for your lifestyle and your future.
Enjoy a Change in Scenery (or Weather)
When you have two homes, you can alternate between them as the weather changes or as you crave different scenery. Do you want to live in an area with a particular season? Would alternating between a resort and a suburban setting be ideal? With two homes, you have those options. Being able to move between homes based on which location best suits you at the time gives you added flexibility and variety that can help increase your happiness.
Build Your Wealth Faster
You may have heard that home equity is skyrocketing, thanks to ongoing home price appreciation.CoreLogicreports that the average homeowner gained $56,700 in equity over the last year. With home prices projected to continue rising, if you purchase a second home, you could benefit from rising equity on both properties to build your wealth (and your net worth) even faster.
Be Closer to Loved Ones
The pandemic has also reignited the importance of being near our loved ones. One option worth exploring is whether you want your second home to be near the people who matter most in your life. This makes it easier to see your loved ones but still gives you your own dedicated, private space so you can be nearby for major life events or longer visits.
Lock in Your Expenses
Buying a second home today and locking in your mortgage rate may be a good option if you’re looking to stabilize your housing costs for the long haul. If you’re approaching retirement or are looking to use your second home as your permanent residence in the future, buying that house now with today’s rate and price may be a good financial decision. That way, no matter what happens with rates and prices in years ahead, your monthly payment is locked in for the next 15-30 years.
Bottom Line
Having multiple homes has considerable benefits. If owning a second home is something you’re interested in, let’s connect to explore your options, discuss the benefits, and take the next step to start your home search.
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