We’re very much still in a seller’s market, but the incredible rate of appreciation we’ve been experiencing has started to slow as of late. Home prices are still rising, albeit a bit more slowly. Despite the increase in new inventory, houses are still selling in under a month.
The National Association of Realtors sees the surge in home prices that we’ve experienced over the last year as an anomaly that was driven by pent-up demand due to the pandemic and low interest rates. Now that things are starting to settle down again, we’re seeing last year’s trends ease as well. NAR chief economist Lawrence Yun said, “The housing sector is clearly settling down. Home sales are trying to return to a normal equilibrium after that big surge we saw last year.”
The median price of a home nationally now sits right at $375,000. That’s an astounding appreciation of 15% from last year. The average days on market is 28 days. These quick sales are also due to the continued lack of inventory. A healthy market should have six months of inventory, but right now we have 2.6 months.
BCA Research puts it like this:
“While we expect growth momentum to ease, temporary forces due to the Delta variant accentuated the moderation in activity between August and September. The reports note that health concerns are weighing on the service sector. Similarly, labor supply and material shortages are restraining manufacturing output and pushing up the backlog of work. Meanwhile, supply chain disruptions and rising transportation costs are raising price pressures. Higher input costs are being transferred to clients in the form of an increase in output prices.”
All of these factors are coming together to hurt affordability. The percentage of buyers who were buying for the first time dropped to 29%, a low we haven’t seen since January of 2019. However, economists are hopeful that we’ll see more inventory reach the market soon. The chief economist at Keller Williams, Ruben Gonzalez, said, “Overall, we think home sales will remain strong going into next year, but we should see inventory levels continue to slowly trend toward more normal levels and home price appreciation begin to slow over time.”
If you’re thinking about selling your home, you haven’t missed your chance. This is still a seller’s market, and you can net a great profit from your house. Enter your address here to instantly calculate your home’s value in today’s market based on recent sales.
If you have any questions about our market or are thinking about buying or selling, don’t hesitate to call us at (574) 529-5228 or email us at Natasha@NatashaHernandez.com. We’re here to help you meet your real estate goals in this shifting market.