Yes, we have more demand than we have supply. Yes, prices are going up. And no, this is not a hot market, a hot market has those and high velocity. Today’s market is low velocity. We have below normal buyer demand and far lower seller interest. The few buyers we have are easily outpacing the even fewer sellers we have.
New contracts are significantly outpacing new listings on a weekly basis. New listing levels are at the lowest in 23 years (back when we had a million fewer people). And the gray area in the back shows the overall listing count decline through week 14. It is too early to tell if last week’s overall supply increase is the start of a trend or an anomaly. Q2 is the time when listings usually increase but so far there is not a lot of indication of that happening. The low mortgage rate lock-in effect continues unabated. We are seeing stability come into the market and demand recovered faster and has stayed consistent for longer than expected. With inventory as low as it is, interest rate fluctuations are not impacting sales prices, which have not only stabilized but are increasing.
The laws of supply and demand do not change. Affordability is challenged and interest rate increases only further challenge it and yet demand continues to increase while supply continues to decrease. Under those conditions, prices will only go up.
Now is not the time to overprice a listing. Now is the time to price it as close to the market as possible. Buyers are well-educated and with the few new listings coming each week, they are watching daily. When something comes up that presents well and is priced right, it is gone in less than a day.
We continue to move through uncharted territory. The uncertainty of the 2020s continues which has been leaking fear into not only housing but the entire economy. Remember, people need real information about what is actually happening to make good choices. The real estate market is stable. Sellers have an advantage and prices are increasing.
Sarah Perkins is an award winning account executive and has been in title sales since 2004. As the Director of Industry Research & Senior Account Executive, Sarah’s role is to bring real estate transactions to Navi Title. Sarah supports her clients by helping them navigate the ever-changing real estate space through thorough research and understanding of current trends impacting today’s home buyers and sellers.