Voices from the real estate industry have been increasingly hinting at the likely increase in housing inventory as we approach the spring season. This is a much-anticipated development given the period of tightness witnessed over the past several months. In the wake of this prediction, home buyers who have kindly endured fierce competition and skyrocketing home prices might finally end up having the last laugh.
Across the nation, homeowners who previously hesitated to list their homes due to the tumultuous environment created by the COVID-19 pandemic are now readying themselves to jump back into the marketplace. In conjunction with historically low mortgage rates and an overall favorable economic outlook, this upcoming change is set to further animate the already buoyant residential housing market.
The Back Story
To put everything into perspective, the genesis of this intensified housing demand can be traced back to early 2020. The economic shocks brought about by the pandemic led to major shifts for both home buyers and sellers. In response to lockdown measures and the drastic rise in remote work, people began reassessing their living situations. More space and new locations suddenly became high-priority considerations.
Parallel to this increased demand, uncertainty grew among potential sellers. They were hesitant to put their homes on the market for fear of not finding a new one, or of exposing their households to the virus via prospective buyers. This subsequently pushed housing inventory to an all-time low and created the perfect storm for a surge in home prices.
The Scene Today – Home Prices & Interest Rates
Cut to the present time, and home prices continue trending skyward. The frenzy of buyer activity propelled by incredibly low mortgage rates has kept the ball rolling. Even with a slight rise in these rates, home purchasing power remains robust given the economic bounce-back. Interest rates for most of 2020 and the early parts of 2021 remained at a historic low, thanks to measures taken by the Federal Reserve. The prospect of those rates increasing only pushed more individuals to jump on the first available opportunity to buy a home.
Analytics and Housing Market Trends
As a valuable gauge for what’s to come, property analytics provide a clear framework. Continual monitoring allows us to project future trends and behavior based on studied patterns. Several signs are indicating that we’re on the threshold of a transitional phase in the home selling realm, and industry analysts are actively tracking any signs of inventory expansion in the upcoming spring period.
In fact, according to several reports, inventory levels have started to increase modestly, hinting at a potential surge in the coming months. As we observe the steady incline, it is crucial to remember that this change doesn’t manifest overnight. The anticipated growth will be gradual, but will invariably open more doors for keen homebuyers.
The role of key cities also comes into play. The influx of sellers in major market regions vastly affects the overall inventory scale. Data already suggests a budding seller’s market in several key cities, serving to bolster the prospect of a nationwide inventory increase.
How Buyers and Sellers May Respond – Looking Forward
The forthcoming swell in the housing market will be a breath of fresh air for many potential home buyers. Having more options to choose from and less competition will alleviate much of the stress that has previously been associated with house hunting in recent times. However, it is also a reality check for sellers who have grown accustomed to their ‘sellers’ market’ comfort zone.
While sellers will still have a viable market in the spring, they will need to ready themselves for a slight tilt in dynamics. The influx of inventory will mean more competition among sellers. This means that homeowners will need to polish their value proposition, possibly invest in home improvements, and price their homes competitively in order to entice buyers.
Despite the potential shift towards a buyers’ market, it is important to consider all aspects. Market trends indicate an appreciation in home values due to the low inventory. Therefore, those who sell now will likely benefit financially. However, they could face stiff competition on the acquisition end, especially considering the possibility of higher mortgage rates.
The Wrap-Up
In conclusion, the future of the housing market looks promising for prospective buyers. Preparing for a potential inventory surge will require potential sellers to rethink their strategies while promising an exciting playing field for eager buyers. The emergence of more selections, reduced competition, and potentially moderated prices are the elements that potential homeowners have been waiting for, and this spring could finally provide that relief.
