According to a Realtor.com report, About 64% of prospective home sellers plan to list their properties by the end of August 2022. Of these tentatively planned sales, a sizable 43% of those selling have expected prices below $350,000 — the range more first-time buyers target — and about 21% anticipate listing between the prices of $350,000 and $500,000.
We know an inventory shortage won't always be the case, and here in Las Vegas, we are seeing more inventory consistently every month.
Available homes in the Greater Las Vegas Area at the end of each month without offers
February 2022 - 1,741
March 2022 - 2,005
April 2022 - 2,441
May week ending May 8, 2022 - 2,949
Danielle Hale, chief economist at Realtor.com
“Our forecast expectation is that inventories would increase between 0% and 1% this year. We may see a slower pace of sales in the fall because rising mortgage rates are pushing up housing costs so much. It may even cause a slightly bigger-than-usual recovery in for-sale inventory.”
Len Kiefer, deputy chief economist at Freddie Mac
“Buyers have been thrown for a loop because of how frenetic the housing market is and how fast homes are selling. I anticipate we get a much more typical seasonal pattern this year; people start listing in the spring, and of course, activity heats up too. Then the homes that didn’t sell through spring and summer sit on the market and that’s where you see inventory pick up.”
In 2022, we saw mortgage rates soar. Historically, rates tend to skyrocket over a very short period and then parachute down over a longer duration. The mortgage rate jump has pushed first-time buyers out of certain markets where affordability is scarce. Furthermore, it has concerned sellers who currently have a low mortgage balance and a very historically low-interest rate, giving them pause. Sellers have been worried about trading their current mortgage in for a more expensive one at a higher interest rate. Even before rates jumped, home prices have grown at double-digit percentages annually for each of the past 12 months.
The shift in the market could come sooner than expected. If sellers collectively decide to list at the same or similar times this could be a quick injection of more than anticipated inventory, wherein similar homes are listed for sale and buyers have some choices. Buyers could gain some leverage back if inventory does flex.
This could affect the double-digit returns currently in play; as more inventory comes to market the more the prices will stabilize. This is on the principle of basic supply and demand. There will be more homes for buyers to choose from, and sellers are more likely to have 1 or 2 offers instead of the 10 or 20 we saw in February of 2022. The market could slow down with more inventory available and that means homes will sit for sale longer and more inventory can continue to accumulate. The market, however, may not fully normalize until 2024 or 2025 as demand, bottlenecks, and inventory all catch up to each other.
Trying to buy a house right now is tough with the growth in prices and mortgage rates and the lack of homes for sale.
Of course, there are many success stories when you partner with the right agent and use the right tools and negotiations you have a strong advantage to help strengthen your buying position.
LOOKING TO SELL?
For sellers, what a great time to sell! Inventory is low and motivated buyers are looking for houses for sale. Sellers don't have competition with as many property owners. Some would be sellers have decided to wait out the pandemic, but more and more buyers enter the market. This only further pushes the pricing point higher due to tight supply. Check your home's value here! or CONTACT ME HERE FOR MORE INFORMATION!
LOOKING TO BUY?
For buyers, the inventory is slowly increasing and mortgage rates are at historic all-time lows, record-breaking never seen before lows. Buyers are out in force taking full advantage of their higher than usual purchasing power. It is a win-win scenario for both sellers and buyers. CONTACT ME HERE to get started!