Dear Friends and Clients,
Our market is on fire, and it isn’t even spring. Low interest rates have spurred demand, but there aren’t many houses for sale, meaning sellers have less competition. Supply is hitting an all-time low, so if you’ve been sitting on the sidelines, it could be time to finally list your home.
Total inventory was down 28% year over year in January, and new listings were down 9%. Why aren’t people listing their homes even though they can get a fantastic deal? According to Danielle Hale, chief economist at Realtor.com, “Factors like omicron uncertainties could be causing sellers to hesitate even when they know housing conditions are favorable.”
Our lack of supply might lead you to think our market is slowing down, but things might be hotter than they have ever been. The average home spends just 61 days on the market right now, and in metropolitan areas, it’s much less than that. That’s the fastest pace recorded by Realtor.com since they started keeping track of it in 2016.
Home builders are trying to build as fast as possible to meet demand, but supply chain issues are gumming up the works. Now that the worst of the omicron surge is over and builders continue to try and meet demand, our lack of supply (and lack of competition) may be in its twilight.
Supply isn’t the only factor making our current market so crazy. Interest rates are finally increasing, and buyers are feeling the pressure. According to Ralph McLaughlin, chief economist at Kukun, “High levels of inflation could make it more difficult for first-time homebuyers to save for a down payment.”
As inflation increases, the Federal Reserve will try to raise rates to keep it in check. Many buyers want to take advantage of the low rates while they can.
If you’re worried you’ve missed the boat on selling because rates are rising, don’t fret. As global tension increases and the world becomes more uncertain, real estate becomes a safer bet for investors. According to Taylor Marr, deputy chief economist at Redfin, tensions with Russia could keep interest rates lower for longer. “On the one hand, you have the Fed putting upward pressure on mortgage rates, and then on the other hand, these global tensions are anchoring rates a little bit."
What does all of this mean for you? Now is still a fantastic time to sell, but the future is uncertain. Supply levels may finally increase, and demand may finally level out, so if you are looking to sell, this could be the best time to do so for a while. Buyers won’t be able to afford our rising prices forever, so take advantage while you can.
If you’re curious about what your home is worth in today’s market, you can use this home value calculator, which takes into account recent Austin sales:
Enter your address here to find out what your home is currently worth.
This is just to get you started. If you’d like a more accurate home valuation, please reach out to us via phone at 512-829-8000 or email at chriswatters@wattersinternational.com
Also, if you’re worried about moving after selling your home, we have plenty of experience helping people in your exact situation.
Let us know if there is anything we can do to help,
Chris Watters
Looking to buy a home? Looking to sell a home?
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