For years, the real estate market slanted heavily in the sellers’ favor, to the point where there were massive bidding wars and homes were regularly selling for well over their asking price. Now, however, the tide seems to be changing. Below are three metrics that indicate we’re headed toward a buyer’s market. Keep reading to learn more.
Inventory levels are jumping up
Part of the reason that the seller’s market has been so prominent these past few years is that inventory levels have been down at record lows. When there are only a few available properties on the market, buyers must compete over the same few available properties, which leads to bidding wars and substantial price escalation.
On the other hand, when inventory levels rise, there are more homes available so there is less competition. Homes tend to sit on the market a little longer and sellers tend to be more willing to negotiate in order to woo interested buyers.
According to Realtor.com’s September 2022 Monthly Market Report, available inventory has increased 26.9% nationwide since the same time last year, which is a substantial increase.
Time on market is getting longer
Next, it’s important to look at time on market. This metric measures how long a property is listed and marketed before it goes under contract. In seller’s markets, available inventory tends to move rather quickly, leading to a low time on market. However, in slower markets, properties usually need to be marketed for a bit longer before they find a buyer.
Again, as homes sit on the market, sellers have a tendency to become more willing to negotiate with buyers. The longer a home is on the market without interest, typically, the more amenable sellers become.
The Realtor.com report found that the average time on market now measures 50 days, which is seven days more than the same time last year. Still, it’s worth noting that the current average time on market is still 18 days less than was common before the pandemic.
Home prices are dropping
Lastly, the strongest sign that we’re entering a buyer’s market is that home prices are starting to drop. When home prices drop, buying suddenly becomes more affordable and buyers suddenly begin to have more purchasing power than they did in the past.
Although the decline is slow, it is starting to become more apparent. Realtor.com found that, while home prices have still increased by 13.9% year-over-year, this figure represents a decline. It’s down from 15.4% last month and a peak growth rate of 18.2% in June. Overall, the median national list price is currently $427,000, which is down from June’s high of $449,000.
Ready to enter the new market?
If you’re ready to take advantage of the coming buyer’s market, reach out to Park Cities Mortgage today. One of our experienced mortgage lenders can help you get a sense of the options that are available to you.
Park Cities Mortgage is an Equal Housing Opportunity lender. Sponsored by NTFN, Inc. 5950 Sherry Lane, Suite 230, Dallas, TX 75225 | NTFN NMLS 75333.