Category: Market Update

There have been a lot of shifts in the housing market recently. Mortgage rates rose dramatically last year, impacting many people’s ability to buy a home. And after several years of rapid price appreciation, home prices finally peaked last summer. These changes led to a rise in headlines saying prices would end up crashing.

Even though we’re no longer seeing the buyer frenzy that drove home values up during the pandemic, prices have been relatively flat at the national level. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), doesn’t expect that to change:

“[H]ome prices will be steady in most parts of the country with a minor change in the national median home price.”

You might think sellers would have to lower prices to attract buyers in today’s market, and that’s part of why some may have been waiting for prices to come crashing down. But there’s another factor at play – low inventory. And according to Yun, that’s limiting just how low prices will go:

“We simply don’t have enough inventory. Will some markets see a price decline? Yes. [But] with the supply not being there, the repeat of a 30 percent price decline is highly, highly unlikely.”

As you can see in the graph below, we’ve been at or near record-low inventory levels for a few years now.

That lack of available homes on the market is putting upward pressure on prices. Bankrate puts it like this:

“This ongoing lack of inventory explains why many buyers still have little choice but to bid up prices. And it also indicates that the supply-and-demand equation simply won’t allow a price crash in the near future.”

If more homes don’t come to the market, a lack of supply will keep prices from crashing, and, according to industry expert Rick Sharga, inventory isn’t likely to rise significantly this year:

“I believe that we’re likely to see low inventory continue to vex the housing market throughout 2023.”

Sellers are under no pressure to move since they have plenty of equity right now. That equity acts as a cushion for homeowners, lowering the chances of distressed sales like foreclosures and short sales. And with many homeowners locked into low mortgage rates, that equity cushion isn’t going anywhere soon.

With so few homes available for sale today, it’s important to work with a trusted real estate agent who understands your local area and can navigate the current market volatility.

Bottom Line

A lot of people expected prices would crash this year thanks to low buyer demand, but that isn’t happening. Why? There aren’t enough homes for sale. If you’re thinking about moving this spring, let’s connect.

Shawna O’Brien, Executive Club
F.C. Tucker Geist Fishers
shawna.obrien@talktotucker.com
317-506-0039

Even though activity in the housing market has slowed from the frenzy we saw over a year ago, today’s low supply of homes for sale is still a sellers’ market. But what does that really mean? And why are conditions today so good if you want to list your house?

It starts with the number of homes available for sale. The latest Existing Home Sales Reportfrom the National Association of Realtors (NAR) shows housing supply is still astonishingly low. Today, we have a 2.6-month supply of homes at the current sales pace. Historically, a 6-month supply is necessary for a ‘normal’ or ‘neutral’ market in which there are enough homes available for active buyers (see graph below):

What Does This Mean for You?

When the supply of homes for sale is as low as it is right now, it’s much harder for buyers to find one to purchase. That creates increased competition among purchasers and keeps upward pressure on prices. And if buyers know they’re not the only one interested in a home, they’re going to do their best to submit a very attractive offer. As this happens, sellers are positioned to negotiate deals that meet their ideal terms. Lawrence Yun, Chief Economist at NAR, says:

“Inventory levels are still at historic lows. Consequently, multiple offers are returning on a good number of properties.”

Right now, there are still buyers who are ready, willing, and able to purchase a home. If you list your house right now in good condition and at the right price, it could get a lot of attention from competitive buyers.

Bottom Line

Today’s sellers’ market holds great opportunities for homeowners ready to make a move. Listing your house now will maximize your exposure to serious, competitive buyers. Let’s connect to discuss how to jumpstart the selling process.

Shawna O’Brien, Executive Club
F.C. Tucker Geist Fishers
shawna.obrien@talktotucker.com
317-506-0039

While home prices and inventory continued to increase in February in central Indiana, the market continued to be strong and steady. According to F.C. Tucker Company, part of the Howard Hanna family of companies, in February 2023, central Indiana housing inventory increased 76 percent, compared to February 2022. Pended home sales decreased 8.7 percent, and year-to-date home sale prices increased 7.4 percent.