As you follow the news, you’re likely seeing headlines discussing what’s going on in today’s housing market. The chances are high that some of the more recent storylines you’ve come across mention terms like cooling or slowing when talking about where the market is headed.
But what do these terms mean? Today’s housing market is anything but ordinary, and it’s still a solid sellers’ market, especially when compared to the few years leading up to the pandemic. With that in mind, what can previous years tell us about today’s real estate market and if it’s genuinely slowing?
We Still see an Above Average Number of Sales.
You may see headlines about a drop in home sales. But are those headlines telling the whole story? The most recent Existing Home Sales Report from the National Association of Realtors (NAR) does show a drop of about 2% from July to August. But the month-over-month decline doesn’t provide the full picture (see graph below): As the graph shows, historical context is critical. Today’s home sales are well ahead of some of the more normal years that led up to the health crisis. That means buyers are still in the market, which is excellent news if you plan to list your home.
Houses Are Selling Faster Than Usual
When headlines mention the market is slowing, sellers may naturally wonder if their house will sell as quickly as they’d like. According to the most recent Realtors Confidence Index from NAR, homes are still selling at record speed (see graph below): Again, if we look back at data from previous years, we can see the average time on the market – 17 days – means homes are selling faster than a moderate pace.
Bidding Wars Are Still the Norm
The Realtors Confidence Index from NAR also shows a drop in the average number of offers homes receive in August. Many headlines may focus there without providing the important context (see graph below): Again, it’s essential to compare today’s market to trends from recent years. Currently, the average number of offers per listing is higher than 39 of the previous 45 months. That means the likelihood of a bidding war on your home is still high. And the number of offers your house receives can have a significant influence on the final sale price.
So, Is the Market Slowing Down?
While there are slight declines in various month-to-month data, it’s important to keep historical context in mind when determining what’s happening in today’s market. Odeta Kushi, Deputy Chief Economist at First American, put it best recently, saying:
“It’s not the white-hot market from earlier in the year & it’s not the 2020 market benefiting from a wave of pent-up demand but make no mistake this is still a hot housing market.”
Don’t let headlines make you rethink listing your home this fall. Selling today means you can still take advantage of high buyer demand, multiple offers, and a quick sale. If you’re thinking of selling your house, let’s connect and discuss why this fall is the perfect time to do so.