Spring is generally the biggest season for buying and selling homes and this year is going to be the leanest year the market has ever had. Inventory was already at a record low, however, weather conditions in certain parts of the country have made it even worse. There are still a lot of potential sellers that are hesitant about putting their homes on the market.
According to CNBC.com the spring housing market has recently lost more than 200,000 new listings. Severe weather conditions and other factors like the pandemic led to a big pullback by sellers. There are about 207,000 fewer homes listed for sale in the last 2 months compared to what we have seen on average in the last four years. For things to regulate, new listings would have to go up 25% in March and April, which is likely not possible.
As supplies dwindle, prices continue to go up. CoreLogic reported that in January prices had increased to just over 10% year over year. The mortgage rates are rising as well, which is affecting affordability for some buyers, however, this has not yet affected the rising prices.
The low supplies are causing seller’s to be more aggressive with their asking prices. According to Redfin the asking prices of new listings has hit a record high of $347,475 in February. Redfin also reported that 55% of homes that went under contract in February were only on the market for two weeks. This number was 44% a year ago. So, sellers really do have a reason to be cavalier with their asking prices.
Obviously, the issues with weather are temporary, however, the increasing mortgage rates – one of fuels on the housing market fire – will affect affordability and lead to fewer bidding wars.
If you are a potential seller and are still unsure if you should list, you really should not be. Buyers are extremely motivated right now, however, as the mortgage rates go up, fewer of them would be willing to pay a lot above asking. Your chances of big offers and bidding wars will lower over time. If you are hoping to buy, it is not impossible to do so, it just takes a little extra effort. Amin Vali Real Estate Investment is here to help you whether you want to buy your dream home, or if you have a property to sell at the best possible price.