#1 Real Estate Trend 2023: Inventory on the Rise, But at a Slow Pace
If you’re looking to buy a house in the American market, you must have noticed the dip in the seller’s market. There are not as many houses with the sign ‘For Sale’ in the real estate market as there used to be. According to the Existing Home Sales Report from the National Association of Realtors (NAR), the total housing inventory was down by 18.8% in 2020 in comparison to 2019. The difference only grew to increase in 2021.
Fortunately, the situation seems to be changing in 2023. As per reports, the real estate inventory has been on the rise since May 2022. The market saw a significant increase in November 2022 by 46% compared to November 2021.
However, the rate of the rise is extremely slow right now. November 2022 still saw 38% fewer active home listings than pre-2020. So while it’s not a drastic increase, the trends appear to be changing in the favor of the market.
In this blog, we will break down the impact of this real estate trend on sellers and buyers, and understand the reason behind it.
The Impact of Low Inventory Levels on the Real Estate Market
How Does Low Inventory Levels Impact Real Estate Buyers?
Low inventory levels in a real estate market are bad news for buyers. Since the number of sellers is low in the market, the demand from buyers will increase. It leads to existing sellers raising their house prices. So sellers will charge more for homes while buyers have fewer and more expensive buying choices. Hence, the market becomes challenging for buyers.
So if you’re entering the housing market as a buyer, don’t be surprised if you end up spending more on a home today, especially in Idaho, Utah, California, Oregon, and Washington.
Also, you need to be on your toes when it comes to house hunting. It’s because the available houses on sale will go out of the market quickly. According to statistics, homes were typically on the real estate market for 74 days in November 2020. In November 2022, it dropped to 56 days. So you need to be quick at decision-making if you want to buy a house you have your eyes on.
Getting professional help in such times boosts your chances of getting a desired home. A real estate agent knows the ins and outs of the current market situation, and they direct you to the right places at the right time. Moreover, since they have internal connections, they can pull up the strings in your favor.
One important thing to consider when you’re purchasing a house in a low-inventory market is you might need to make some sacrifices. Since the options are low, you may have to redirect your search to less popular neighborhoods or settle for a home that differs from your needs.
What to Do If You’re a Buyer in a Low-Inventory Real Estate Market?
● Look Past Your Bid
You want to bid the highest to buy the house. However, every other buyer must be doing the same. So if you want to win in a multiple-offer situation, consider other factors, like being flexible on the closing date and limiting contingencies.
● Be Ahead on the Mortgage Application Front
If you are planning to finance the house, do the legwork in advance about the type of mortgage you need. It shows that you’re financially eligible and are ready to get through the deal quickly.
How Does a Low Inventory Level Impact Real Estate Sellers?
Low housing inventory works in favor of real estate sellers. For starters, since there are not many sellers in the market, the competition is low. Buyers don’t have many options to choose from, so there will likely be multiple offers on your home, which will quickly drive up the price. Moreover, if your home is in a desirable location or has sought-after features, your property will be a hot demand in the market.
So if you are putting your home up for sale in a seller’s market, expect your home to sell faster at a profitable price.
What to Do If You’re a Seller in a Low-Inventory Real Estate Market?
Here’s how you can leverage your seller position in a low-inventory situation –
● Refine Your Property
If you want to boost the foot traffic to your property and make it attractive, brush it up. Just cleaning and touching it up will work in your favor.
● Look Beyond the Price
It’s tempting to sell your property to the highest bidder. However, don’t get swayed by the highest bidding. Take your decisions after assessing the buyer’s finances and contingencies. It will reduce the risk of a deal falling through.
The real estate inventory levels in your market largely impact your decisions about buying or selling a home. You should be on top of the real estate market trends to make the right decisions at the right time.
The best way to go about it is to consult a real estate professional. As experts, they know the market situation and can suggest the best actions for how you can proceed to negotiate a deal.
If you want more inside scoop on the real estate market and its trends in 2023, keep following ZipperAgent’s blog space.