Will the Housing Market Chill This Fall?

By
Home Builder

The housing market has been hot for what feels like ages. Late spring and summer are the hottest months to sell a house, so it makes sense that these last few months have caused a significant buzz in the market.

Now that 2021 has passed through those days, where can you expect the housing market to go? Trends say that the market will be cooling down, making it the opportune time to act if you’re looking for a new home.

How COVID-19 Affected the Housing Market

COVID-19 turned the world upside down, and the housing market is no exception. The market has remained hot for a long time now, and no signs are pointing to the market going completely cold. You’ll likely see more activity than what’s considered normal.

Unfortunately, unemployment rates are higher as a result of the pandemic. More unemployment increases the likelihood of homes going into foreclosure, which are then sold at a lower rate than if the homeowner sold the house. Foreclosures are great for first-time homebuyers if they feel ready to commit to a deal.

Also, as a result of COVID-19, people have been moving. Working from home has opened plenty of doors for families to move wherever they want rather than staying in one location. Many people took advantage of this trend and moved away, causing the tumultuous market seen earlier this year. Almost 16 million people moved during the early stages of the pandemic.

Now, people are becoming more settled in place. The people who wanted to move during the pandemic have likely set down their roots now. The market cooldown could result from the exodus finally slowing down, leaving fewer people craving to move. If you’re looking to sell your home, you might have some difficulty being picky. If you want to find a new house, though, you’re in luck — it’s a buyer’s market.

Current Trends in the Housing Market

Exploring trends allows you to see how the market may swing shortly. You can choose to leap in with the trends and get ahead of the majority, or you can decide to sit it out and see how the season goes before fully committing to a decision. There’s no telling how long a trend will last, so sometimes it’s better to play it safe.

1. It’s a Buyer’s Market

Since things have cooled down from the earlier part of the year, you may find that more sellers are open to negotiations than they were earlier in the year. You’ll find people who are serious about selling and want to find a buyer who meets their needs.

Fewer homes have sold above their asking price. The homes that sell higher than their listing price now make up around 50% of homes sold, which means buyers are gaining more leverage than ever to purchase a home within their budget.

2. Keep an Eye on Foreclosures

If you’re a first-time buyer, a foreclosure might be the way to own your first home. Since there will be more foreclosures, you’ll likely find the opportunity to purchase a house for cheaper than you’d expect.

Home sellers may have to lower their costs to keep up with foreclosures that may appear in their area, so keep an eye out for exciting trends in your area, no matter their origin. Just because a home is foreclosed doesn’t mean there’s anything wrong with it, so if one looks nice and is within your budget, you should embrace it.

3. Inventory Is Improving

There may not be enough supply to meet everyone’s demands for a home right now, but that may change this season. Slowly, more inventory is becoming available, meaning you’ll find less and less competition as time goes on. You’ll have the time to think through your decisions rather than committing to something you’re unsure about for fear of losing the deal.

If you aren’t fully ready to commit to buying a home right now, it might be in your best interest to wait and see how the market plays out next spring.

4. Fewer Bidding Wars

With fewer people shopping for a home, you likely won’t have as much competition when putting in an offer. You might save more money than you anticipated because sellers might feel under pressure to sell to a worthwhile buyer, even if it’s not at the price they want. Homes seem to be on the market for longer periods without an offer, which means you could find a home you like that a seller is desperate to make a deal on.

5. Expect a Busier-Than-Usual Season

It seems like the market hasn’t entirely gone ice-cold, though it has cooled down a bit. The COVID-19 pandemic has thrown off the expected timing of things, so it’s possible to see a hot market in the fall still. While you should prepare for the worst, you should expect the best.

There are several reasons why people could be putting their homes on the market right now. They could have considered that earlier in the year wasn’t the right time to sell, or maybe they had to move suddenly. Since the pandemic has obliterated the average time frames of selling, it just means you’ll find more homes available to you if you’re looking to buy a new house.

How to Navigate the Cooling Market

If you’re planning to sell your home, you should wait a while to see the proven path the market takes. While it might be projected to be a buyer’s market, things could still happen that allow the market to lean in your favor.

Otherwise, now may be the time to search for your dream home. You’ll find sellers more likely to negotiate to snag a precious deal, or you might find that you have a larger catalog of houses to look through.

What you do with the market depends on what you want out of it. While the market may not be on your side this time, you can still have hope for the future. The housing market doesn’t stay in one place forever, so by this time next year, you may see a drastically different outcome.

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