According to Inman and industry economist, the housing market is on the cusp of an “inflection point” right now.
This shift will impact prices, supply, and demand and It’s a big deal. The crazy market of the past two years that was fueled by low interest rate is fading away, and we are beginning to see the market tip at least slightly more toward buyers.
Here’s what we’ve have seen in Orange County:
- Inventory has increased by 60% since mid-Jan and 12% since April.
- Inventory is now around 1,600 homes in the entire county.
- The number of new escrow has slowed down and we are down by 27% compared to last year and we have not seen demand this low since 2007.
And you might be curious, Is the Shifting Market a Challenge or an Opportunity for Homebuyers?
If you tried to buy a home during the pandemic, you know the limited supply of homes for sale was a considerable challenge. It created intense bidding wars which drove home prices up as buyers competed with one another to be the winning offer.
But what was once your greatest challenge may now be your greatest opportunity. Today, data shows buyer demand is moderating in the wake of higher mortgage rates. Here are a few reasons why this shift in the housing market is good news for your homebuying plans.
There were many reasons for the limited number of homes on the market during the pandemic, including a history of underbuilding new homes since the market crash in 2008. As the graph below shows, housing supply is well below what the market has seen for most of the past 10 years (see graph below):
But that graph also shows a trend back up in the right direction this year. That’s because moderating demand is slowing the pace of home sales and that’s one of the reasons housing supply is finally able to grow. For you, that means you’ll have more options to choose from, so it shouldn’t be as difficult to find your next home as it has been recently.
And having more options may also lead to less intense bidding wars. Data from the Realtors Confidence Index from the National Association of Realtors (NAR) shows this trend has already begun. In their recent reports, bidding wars are easing month-over-month (see graph below):
If you’ve been outbid before or you’ve struggled to find a home that meets your needs, breathe a welcome sigh of relief. The big takeaway here is you have more options and less competition today. Just remember, while easing, data shows multiple-offer scenarios are still happening – they’re just not as intense as they were over the past year.
- The housing market is moving away from the frenzy of the past year and it’s opening doors for you if you’re thinking about buying a home. Housing inventory is increasing, which means more options for your search. Plus, the intensity of bidding wars may ease as buyer demand moderates, leading to fewer homes selling above asking price.
Trying to navigate the current market is very tricky, BUT with the right Realtors by your side anything is possible! Here at the Stephanie Young Group we would love the opportunity to be your partners on your Home Selling & Buying Journey and Guide you HOME with 𝒜𝓁𝑜𝒽𝒶!