People who wanted to sell their homes had a great time for a long time. People were rushing to buy homes because they were selling so quickly. Things are starting to change, though. There is still a lot of competition for buyers in some areas, but there are more homes for sale in others, giving buyers a little more room to move.
This story is about two markets, and it makes a big difference when you move which one you’re in.
What Is a Buyer’s Market vs. a Seller’s Market?
Plenty of homes are on the market, but not many people are interested in buying them. There aren’t as many people looking to buy these homes, so they tend to stay on the market longer. They might not sell for as much as they would in a seller’s market, giving buyers more room to negotiate.
That being said, there aren’t enough homes for sale in a seller’s market for all the people who want to buy them. There are more offers on homes, so they sell faster and for more money. Prices go through the roof because buyers are willing to pay more to get the home.
The Market Is Starting To Balance Out
For many years, almost every market in the country was a great place to sell. What that did was make it hard for buyers, especially first-time buyers. Now, though, things are different. Zillow says that the national housing market is leveling off (see graph below):
This graph uses an index to show whether the national housing market is more of a seller’s market, a buyer’s market, or a neutral market. In other words, it shows whether the market is leaning toward buyers or sellers, or whether it’s not really moving either way. Every month, a number between 0 and 100 is used to rate the market. The sellers have a bigger advantage when the price is close to 100.
From 2020 to early 2022, the orange bars in the middle of the graph show the years when sellers had the most power. However, the market has become more stable over time. It went from being a very active seller’s market to a less active one. Of late, it’s been neutral more than anything else (those are the gray bars on the graph’s right side). That means buyers have more power in negotiations once more.
Homes stay on the market a little longer in a more balanced or neutral market. Bidding wars happen less often, and sellers may have to make more concessions, like lowering the price or helping with closing costs. Because of this change, buyers now have more options and less competition than they did a few years ago.
Why Are Things Changing?
Stock is very important. People can choose from more homes when there are more for sale, which slows down the growth of home prices. Realtor.com data (see graph below) shows that the number of homes for sale isn’t growing at the same rate everywhere:
The blue bars on this graph show how inventory has changed since last year, and the red bars show how it has changed from 2017 to 2019 in different parts of the country.
That blue line on the right shows that the number of homes for sale in the South and West of the U.S. has grown a lot in the past year. They’re almost back to where they were before the pandemic. That’s the reason there are more buyer’s markets.
That’s why those red bars are so big: in the Northeast and Midwest, stock is still very low compared to before the pandemic. For now, those places are more likely to stay seller’s markets.
What This Means for You
Each neighborhood market is unique. The news across the country might say one thing, but your town or even your neighborhood might be telling a completely different tale.
It helps you plan your move better if you know what kind of market you’re in. This is why it’s so important to work with a local real estate agent right now.
As Zillow puts it:
“Agents know their local markets inside and out and can come up with buying or selling plans that work in those markets.”
Agents know the specific market trends in your area and can help you buy or sell a home in the best way. You can move no matter which way the market is leaning because they know how to deal with different levels of buyer competition, how to find hidden gems in the area, how to price a house correctly, how to negotiate based on who has more power, and more.
Bottom Line
Talk to a real estate agent in your area if you’re ready to move or even if you’re just thinking about it. They are happy to help you learn about the market in your area and make a plan that works for you.