What Do Past Years Tell Us About Today’s Real Estate Market?
As you follow the news, you’re likely seeing headlines discussing what’s going on in today’s houszing market. 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? The houszing market today is anything but normal, and it’s still an incredibly strong 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 truly slowing?
We’re Still Seeing an Above Average Number of Sales You may see headlines about a drop in housz sales. But are those headlines telling the full 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 key.
Today’s housz 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 great news if you’re planning to list your housz.
Houszes Are Selling Faster Than Usual When headlines mention the market is slowing, sellers may naturally wonder if their housz will sell as quickly as they’d like. According to the most recent Realtors Confidence Index from NAR, houszes 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 market – 17 days – means houszes are selling faster than a normal pace.
Bidding Wars Are Still the Norm The Realtors Confidence Index from NAR also shows a drop in the average number of offers houszes are receiving in August, and many headlines may simply focus there without providing the important context (see graph below):
Again, it’s important 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 housz receives can have a major 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 houszing market.”
Bottom Line Don’t let headlines make you rethink listing your housz 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 housz, let’s connect and discuss why this fall is the perfect time to do so.