Are We Still in a Sellers' Market?

By
Real Estate Agent with RE/MAX Associates RS - 0019092

Ever since interest rates decreased at the beginning of the pandemic, the real estate market throughout most of the country has heavily favored sellers. When interest rates decrease, more buyers enter the market to secure mortgage loans with low interest rates. High buyer demand means that sellers oftentimes receive multiple bids.

The combination of low interest rates, extremely quick sales, low inventory, and rapidly increasing price gains, has the housing market favoring sellers by a considerable amount. While this is still true today, market conditions may be set to change in the near future.

 

What the Future Indicates for Buyers
Over the past six months, interest rates have been steadily increasing. While rates averaged around 3.05% towards the end of 2021, they have since increased to an average of 5.10% as of May. Even though there are still a high number of potential buyers on the market, the higher interest rates have allowed the market to stabilize somewhat.

Keep in mind that home values rose by upwards of 20% over the course of 2021, which means that buying a home today may be somewhat more expensive than it was just one year ago. If you're set to buy a home, the housing market pivoting away from sellers is highly beneficial.

While home prices may have been lower one year ago, the increased buyer competition in the market made it difficult for many buyers to make bids that were high enough to satisfy the seller. Once demand decreases among buyers, home inventory will increase, which means that you may find it easier to purchase a home without needing to make an offer that's far higher than the listing price.

In general, you should expect demand to still be relatively high and housing inventory to be relatively low. However, both of these metrics have improved in recent months, which means that the market shouldn't be as intense as it was in 2021. Home prices are also expected to rise this year but shouldn't come close to the 20% increase that occurred last year.

 



What the Future Indicates for Sellers
If you're looking to sell your home but worry that the market may not be favorable for doing so, the truth is that the housing market still favors sellers. The main difference is that there may not be a lengthy bidding war when you list your home on the market. However, sellers still hold ample amounts of negotiating power when an offer is made. If you want to make sure that your home is sold without delay, perform any necessary upgrades and repairs before placing your home on the market.

While it's unlikely that the housing market will shift completely to favoring buyers, it's looking increasingly likely that the market will be more balanced over the next year or so. A balanced and healthy market is great for buyers and sellers alike.

 

 

 


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Comments (5)

George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Christopher Pataki we are very much in a crazy strong Sellers Market here in CT, and no signs of that changing.

Jun 21, 2022 05:25 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good evening Christopher.

You overall perception for most of the country is very realistic. The sky is not falling, yes some buyers are cut back on what they can afford due to the rise in interest rates and yes we are seeing inventory increase. It's looking increasingly likely that the market will be more balanced over the next year or so. A balanced and healthy market is great for buyers and sellers alike.

Jun 21, 2022 07:08 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Christopher we are no in a balanced almost buyer's market... on a side note any relations to George? Endre

Jun 21, 2022 09:20 PM
Adrian Willanger
206 909-7536 AdrianWillanger-broker.com - Seattle, WA
Profit from my two decades of experience

Christopher, good overview of the housing market.  We're seeing a the scale tipping towards a seller's market with closing prices coming in closer to listing price. 

Thanks for the info.

Jun 22, 2022 11:26 AM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Very true!  It's still a sellers market, for now.  In any market, measure demand to know how strong of a seller's market there is before proceeding so expectations can be managed.  Great post!

Jun 23, 2022 06:17 PM