Just interested in the real estate market? It probably comes as no surprise to know that the housing market was drastically impacted during the COVID-19 pandemic. Sellers, wary of entering the market, decided to press pause, while buyers, incentivized by low mortgage rates and the need for more space, entered the market in record numbers.
This led to extremely low inventory and extremely high demand. Home prices and bidding wars skyrocketed, leaving most sellers satisfied.
However, the real estate market is ever-changing, and these conditions may soon be shifting as the economy recovers and sellers head back to the market. If you’re thinking of dipping your toes in the real estate market in the coming months, these are the trends you should be aware of.
Buyers Are Dropping Out Of Deals Due To High Prices
Home prices are reaching record highs all across the country. This is great news for sellers, who may arguably receive the highest price on their homes if they decide to sell now. However, tacking an extremely high price tag on your home could result in buyers dropping out of your closing deal at the last second.
The reason? After you’ve accepted their bid, the buyer has plenty of time to contemplate the consequences. They reconsider whether they truly want to cough up so much money.
You may not see the problem initially. After all, where one buyer drops out, another is free to take their place. However, if a buyer pulls out of a home sale at the last minute, it leaves others to wonder why leading to a stigma amongst other buyers that there’s something undesirable about your property.
How can sellers avoid this? While the current market conditions allow you to sell your home for a great price, don’t get greedy. If you ask for too much, buyers may end up dropping out of a deal at the last minute, and then you’ll be forced to lower your home price after there’s already an impression amongst other buyers that there’s something wrong with your home.
Bidding Wars Are Slowing Down
Due to the uber-competitive nature of the housing market, realtors were reporting about 20-plus bids per listing earlier in the year. In HomeLight’s Summer / Fall Report, real estate agents only reported about 5 bids per listing.
In fact, only 37% of real estate agents claimed bidding wars are still on the rise — down 52% from the quarter prior.
Along with the reduction of bidding wars, sellers have also been dropping their prices across the country. While prices are still high compared to normal market conditions, this trend may indicate that buyers may see home prices drop in the coming months.
Sellers Will No Longer Be Held Back By Health Concerns
The main reason for such drastic market conditions? Low inventory. Sellers, understandably, were wary of entering the real estate market during the pandemic and inviting a deadly virus into their family home.
While this concern is completely valid and the pandemic is by no means behind us, the vaccine seems to have diminished most sellers’ fears.
If sellers begin returning to the market more steadily, inventory will increase and home prices will hopefully be steady. This means that if you’re a potential seller, this may be the best time for you to contact your real estate agent in order to take advantage of the favorable market conditions.
