Are you considering purchasing a home but unsure if this is the right moment? Many are anticipating and speculating about the next move of the market. However, only the most astute purchasers are aware of this:
The best time to buy in years may be this summer. Here are three main explanations.
1. You Have More Negotiating Power
Things are beginning to change after sellers had all the leverage for a number of years. Take a look at the graph below. It illustrates that there are currently more sellers than buyers in the market using data from Redfin:
Examine the events that occurred from 2021 to about 2023. During that time, there were significantly more buyers (the blue line) than available homes (the green line). That was the driving force behind the fierce bidding wars, fierce competition, and the market’s explosive price growth at the time.
Due to a change in the market, buyers are now regaining their bargaining power. Sellers might be more inclined to cover some of your closing costs, pay for repairs, or reduce their asking price if there are more sellers than buyers. A much healthier and more sustainable market is indicated by the return of this type of normal balance. According to National Association of Realtors (NAR) Chief Economist Lawrence Yun:
“ . . . with housing inventory levels reaching five-year highs, homebuyers in nearly every region of the country are in a better position to negotiate more favorable terms.”
Here are some things to consider if you’re concerned that there are too many houses for sale. You don’t have to be concerned about a national oversupply or a crash because overall inventory is still lower than usual.
2. You Have More Choices
There are now a lot more houses for sale. More homes were listed in May of this year than in May of 2024 or 2023, according to the most recent data from Realtor.com (see graph below):
There are more options when there are more houses for sale. Your ideal match may have just entered the market or may do so in the near future. Therefore, now is a great time to discover what’s available. According to Realtor.com economist Jake Krimmel:
“With more fresh inventory hitting the market, buyers have better opportunities to find a home that fits their needs.”
3. You May See More Flexibility on Price
Homes aren’t selling as quickly as they did a few years ago because there are more homes for sale.
Some sellers are deciding to reduce their asking prices in an attempt to attract buyers again or expedite the process because homes are taking longer to sell. And that is to be anticipated. This May, 19.1% of listings had a price reduction, per Realtor.com (see graph below):
There have been more sellers lowering their prices for the fifth consecutive month. Additionally, as of May, the number of price reductions has returned to normal. This is another indication that the market is becoming more balanced again.
Although a significant discount is not something you should anticipate, sellers may be a little more accommodating at the moment. According to a recent article in The Street:
“Although sellers have had the upper hand in the housing market over the past few years, houses are now staying on the market for longer, shifting negotiating power back to homebuyers.”
Just keep in mind that only those sellers who initially overpriced are changing their prices; the majority of sellers are still not. In a changing market, this indicates that some sellers have out-of-date expectations rather than a crash.
Bottom Line
More homes to pick from, less competition, and more price flexibility from sellers make this summer a potent combination for buyers. Speak with a local real estate agent if you’re prepared to move. They would be delighted to assist you in moving forward.