We’re seeing more home listings, but it’s not a buyer’s market, due to high prices
According to a new housing inventory report from Trulia, we’re seeing more home listings across the country today which might sound like great news for homebuyers since it implies the emergence of a buyer’s market. Low inventory, demographic shifts, and rising prices have made this the most competitive market in recorded history this summer. Just as buyer frustration was about to boil, we’re seeing a shift. The numbers prove it: inventory jumped 12.2% in the second quarter of 2018. In fact, of the nation’s 100 largest metros, 30 reported inventory increases. But does this mean a buyer’s market is on the horizon? Experts warn us not to get ahead of ourselves.
I’m one of the many Realtors across the country seeing this shift in the number of homes on the market as more home sellers are getting their property ready to list. But even with added inventory, homes are still selling at or above the asking price on average, especially here in Montecito and Santa Barbara where demand continues. And I always caution that market changes are relative.
Inventory gains don’t make a dent in the affordability crisis
While more homes on the market means buyers have more options, the increase hasn’t affected skyrocketing home prices — especially in the upscale housing market. In fact, the report says home prices rose up to 4.8% since last quarter, and 5.8% year-over-year.
Definition of a Buyer’s Market
Real estate markets are cyclical for both buyers and sellers. Let’s take an in-depth look at what makes a buyer’s market. We all know that if you’re buying a new home, a buyer’s market is the ideal time to move. That’s when buyers can purchase a great home at a lower cost than they would in a seller’s market. But we’re a long way from being there.
The first step toward a buyer’s market is the supply. The number of available properties for sale has to exceed the number of buyers ready to spend their hard-earned cash. That is slowly happening.
In a buyer’s market, a seller’s property could stay on the market a long time due to competition from a larger pool of available properties in a particular market. Sellers may also be forced to lower their listing price. Finally, they may have to make other concessions in order to make the sale.
Perhaps the most important strategy for buyers in a seller’s market is to hire an experienced buyer’s agent like me. Buyers who are not being guided by an experienced agent miss out on working with someone who is familiar with the community, the market, and contacts. (He or she usually knows most of the seller’s agents.) That negatively affects your chances of having your offer accepted.
Definition of a Seller’s Market
On the other hand, a seller’s market like we’re experiencing right now is a great time to sell, but not such a great time to buy. This occurs when demand exceeds supply; putting sellers in the driver’s seat. Sellers can expect multiple offers, bidding wars and a sale price at or above their asking price with a minimum of fuss or pushback from buyers.
Those looking to buy a house in a seller’s market need to know that preparation is the key. Be prepared to show a seller you can put your money where your mouth is. And those looking to sell a home in a seller’s market should make sure they’re working with the right agent who can get them top dollar.
As you can see, more home listings do not necessarily mean it’s a buyer’s market. More inventory means both buyers and sellers need to pay special attention to who they work with. Read my former blog about what you really need to know to find a real estate agent. If you’re looking to sell a home in Montecito, Hope Ranch or any of Santa Barbara’s upscale communities, or to buy one, I hope that agent is me. Please call at +1-805-886-9378 or email me at Cristal@montecito-estate.com to discuss your real estate needs.