The real estate market is changing, which is good news for buyers. There are signs that we’re no longer in the red-hot sellers’ market that we’ve been navigating for the last few years and rising inventory levels is one of them. According to data from the National Association of Realtors (NAR), June 2022 boasted 3.0 months of inventory, up from 2.5 months at the same time last year. As a buyer, this increase in inventory can be used to your advantage. We’ve explained the benefits below.
There’s less competition
When inventory levels are low, there are fewer available homes on the market at any given time. This shortage creates a situation where a larger pool of buyers end up competing for the same handful of available properties. As a result, competition is fierce. Bidding wars are common, offer prices start to skyrocket, and buyers are more likely to waive contingencies in order to make their offers more attractive to the seller.
However, once inventory starts to rise, there’s more breathing room. Since there are more available properties on the market, there are fewer buyers competing over each listed property. Having less competition ultimately means that buyers don’t have to worry as much about having a home scooped out from under them by another buyer.
There’s more time to make a decision
As you might be able to imagine, when there’s only a few available properties on the market, homes tend to go under contract very fast. Over the last few years, it wasn’t uncommon to see a home put under contract only a day or two after it first entered the market. As a result, buyers had to make decisions extremely quickly if they wanted their offer to be considered.
Fortunately, when there’s more inventory, the market tends to slow down a bit. Since there’s fewer buyers competing for each home, available properties tend to stay on the market longer. This gives buyers more time to think and to weigh the pros and cons of making an offer.
There’s more room for negotiation
Lastly, when inventory is low, there’s very little room for buyers to negotiate with sellers on their home purchase. Since competition and bidding wars are common, the seller definitely has the upper hand in negotiations. They are able to pass over buyers who ask for contingencies or inspections in favor of offers that promise more money or less risk.
However, once the market starts to slow down, buyers tend to have more ability to ask for what they want. As homes start to sit on the market longer, sellers start to get nervous and become more willing to entertain offers that are less straightforward. As a general rule of thumb, the longer a home sits on the market, the more the sellers tend to be willing to accept a lower-price offer or one that has contingencies attached.
Want to learn more about today’s real estate market?
If you’re ready to learn more about rising inventory levels and other factors that affect today’s real estate market, call Park Cities Mortgage today!
Park Cities Mortgage is an Equal Housing Opportunity lender. Sponsored by NTFN, Inc. 5950 Sherry Lane, Suite 230, Dallas, TX 75225 | NTFN NMLS 75333.