Almost every industry is currently struggling with supply chain disruptions. This also applies to the current U.S. housing market, where buyer demand far exceeds housing supply. If you’re thinking of selling your house, you’re likely wondering if now is the time to list. Let’s review what’s been happening with real estate supply and demand so far this year, and where experts expect the market to go next.
Inventory hit record lows in January.
We recently hit record lows for real estate inventory; Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), told us in February’s Existing Home Sales Report that “the inventory of homes on the market remain[ed] woefully depleted, and in fact [was] at an all-time low.”
Data from realtor.com helped confirm this inventory shortage. Here’s a graph comparing inventory levels for January over the last six years:
As the graph shows, new listings coming on the market have decreased over the last four years (shown in blue in the graph). The graph also reveals that carry-over inventory has plummeted in recent years. This is because listings are now sold so quickly, they don’t stay on the market long enough to carry over month-to-month (shown in green in the graph). In other words, homes are not staying on the market for months as they had prior to the pandemic.
In the report mentioned above, NAR reveals that “seventy-nine percent of homes sold in January 2022 were on the market for less than a month.” Demand was sky-high, and inventory could not keep up.
Now, the market is beginning to moderate, but demand is still much higher than supply.
Since January, we’ve seen some changes to the real estate world, but the supply and demand situation remains much the same.
The most recent Existing Home Sales Report, released by the NAR at the end of April, tells us that “total housing inventory at the end of March totaled 950,000 units, up 11.8% from February and down 9.5% from one year ago (1.05 million).”
Lawrence Yun explains: “The housing market is starting to feel the impact of sharply rising mortgage rates and higher inflation taking a hit on purchasing power. Still, homes are selling rapidly, and home price gains remain in the double-digits.” Though the market is beginning to regulate, demand is still very high.
What does this mean for sellers?
Anyone thinking of putting their home on the market shouldn’t wait. A seller will always negotiate the best deal when demand is high and supply is limited. That’s exactly the situation in the real estate market today.
As a bonus, you’re more likely to sell your house for cash right now, as all-cash offers are still popular.
Later this year, inventory (and by extension, your competition) will increase as many homeowners are waiting to put their homes on the market in the summer. There will also be more new builds entering the market soon.
Danielle Hale, chief economist for realtor.com explains: “Although homes are far from plentiful, housing supply could be reaching a turning point thanks to a surge in new listings just as the housing market hits the best time of the year to sell a home. Also, builders are finding a way to build a growing number of new homes despite challenges.”
Bottom Line:
There’s no time like the present! If you want to sell in 2022, do it while demand is high and supply is low. In the current market, it’s also more likely that you can sell your house for cash, which is faster and easier than a financed sale. Of course, if you’d like to get a cash offer without even having to put your home on the market, there’s an even better way:
Work with MarketPro.
At MarketPro Homebuyers, we’ll give you a fast and fair cash offer for your current home just as it is now; no repairs, no inspection, no commissions or fees. You can even choose your exact closing date to coordinate perfectly with the purchase of your new home. Our team will walk you through your quote, including a review of what your home would likely bring on the open market.
If you are in Washington, D.C., Maryland, Virginia, Pennsylvania, or Florida , we’d love to show you how easy and stress-free the sales process can be. Contact us today for a same-day, no-pressure quote.
