How Low Inventory May Impact the Housing Market This Fall

By
Real Estate Agent with REMAX Realty Group Lic. # SL3154233

Real estate continues to be called the ‘bright spot’ in the current economy, but there’s one thing that may hold the housing market back from achieving its full potential this year: the lack of homes for sale.

Buyers are actively searching for and purchasing homes, looking to capitalize on today’s historically low interest rates, but there just aren’t enough houses for sale to meet that growing need. Sam Khater, Chief Economist at Freddie Mac, explains:

“Mortgage rates have hit another record low due to a late summer slowdown in the economic recovery…These low rates have ignited robust purchase demand activity…However, heading into the fall it will be difficult to sustain the growth momentum in purchases because the lack of supply is already exhibiting a constraint on sales activity.”

According to the National Association of Realtors (NAR), right now, unsold inventory sits at a 3.1-month supply at the current sales pace. To have a balanced market where there are enough homes for sale to meet buyer demand, the market needs inventory for 6 months. Today, we’re nowhere near where that number needs to be. If the trend continues, it will get even harder to find homes to purchase this fall, and that may slow down potential buyers. Danielle Hale, Chief Economist at realtor.com, notes:

“The overall lack of sustained new listings growth could put a dent in fall home sales despite high interest from home shoppers, because new listings are key to home sales.”

The realtor.com Weekly Recovery Report keeps an eye on the number of listings coming into the market (houses available for sale) and the total number of listings staying in the market compared to the previous year (See graph below):

real estate market in fort myers

Buyers are clearly scooping up homes faster than they’re being put up for sale. The number of total listings (the orange line) continues to decline even as new listings (the blue line) are coming to the market. Why? Javier Vivas, Director of Economic Research at realtor.com, notes:

“The post-pandemic period has brought a record number of homebuyers back into the market, but it’s also failed to bring a consistent number of sellers back. Homes are selling faster, and sales are still on an upward trend, but rapidly disappearing inventory also means more home shoppers are being priced out. If we don’t see material improvement to supply in the next few weeks, we could see the number of transactions begin to dwindle again even as the lineup of buyers continues to grow.”

Does this mean it’s a good time to sell?

Yes. If you’re thinking about selling your house, this fall is a great time to make it happen. There are plenty of buyers looking for homes to purchase because they want to take advantage of low interest rates. Realtors are also reporting an average of 3 offers per house and an increase in bidding wars, meaning the demand is there and the opportunity to sell for the most favorable terms is in your favor as a seller.

Bottom Line

If you’re considering selling your house, this is the perfect time to chat with a local real estate professional: Abby Stiller with RE/MAX Realty Group to see how you can benefit from the market trends in your local area.

 

info provided by KCM

Posted by

 

Abby Stiller 

Realtor® Lic. #3154233    

14 Years of Experience

RE/MAX Realty Group    Cape Coral Fort Myers Naples  Realtor Cape Coral      

 

I help Home buyers find their dream home & Homeowners sell for more. Thinking of buying or selling? Call/Text me: 239-284-8637   Your Honest & Dedicated Realtor!

or visit: www.TeamStiller.com

 

Home Buyers Specialist     Veteran specialist  Foreclosure short sale specialist

 

Comments (9)

Kathy Schowe
California Lifestyle Realty - La Quinta, CA
La Quinta, California 760-333-8886

Great post Abby!  We are also very low on inventory as we head into our busy season here in the Palm Springs area.  Re-blogging!  Kathy

Sep 22, 2020 08:43 PM
Realtyna Inc
Realtyna - Newark, DE
Realtyna- MLS RETS Integration software & services

Hi Abby, really good post. I think your analysis is spot on. Most sellers need a place to move, and I think the current health/jobs situation complicates things. The economic indicators have been improving, so hopefully that changes.

Sep 23, 2020 02:18 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Great information, thanks for shring.  I hope you have a great day.

Sep 23, 2020 03:08 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good morning Abby Stiller - this is certainly what is pushing prices up and making it harder for new home buyers even with lower rates.

Sep 23, 2020 03:12 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Abby - inventory whether it is scarce or abundant, has a role in the real estate market.  Having knowledgeable and local representation matters regardless of  existing conditions.

Sep 23, 2020 04:08 AM
Brian England
Vacasa - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

People in your area would be wise to reach out to you with all of their real estate questions and concerns.

Sep 23, 2020 05:55 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Abby, we still have very slim inventory, and sales are strong.    With extremely low interest rates, I don't see this scenario changing anytime soon.  Great post.

Sep 23, 2020 06:39 AM
Abby Stiller
REMAX Realty Group - Cape Coral, FL
Professional Bilingual Realtor (239) 284-8637

Hi Kathy Schowe Same here! we are entering to our busiest months of the year. We'll see how this goes specially with the election month. 

Sep 23, 2020 07:34 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Abby,  we are in short supply here now also and hope it gets better soon.  Great picture.

 

Sep 24, 2020 12:03 PM