RIGHT NOW MAY BE THE BEST TIME FOR HOMEBUYERS IN 5 YEARS

LIVING IN PHOENIX, ARIZONA

Right Now May Be The Best Time For Homebuyers In 5 Years

By Julie Taylor, Realtor.com | November 18, 2024

If you’ve been holding off on buying a home, the waning weeks of 2024 might be your moment.

Rising home prices, scarce housing stock, and relentless mortgage rates have made for a tough real estate market.

But now, the tide is starting to turn, and the end of the year is turning into the most buyer-friendly market we’ve seen in a long time. Five years to be exact—before the COVID-19 pandemic turned the real estate market into a wild roller-coaster ride that came to an abrupt halt when mortgage rates doubled.

So what’s changed lately?

We break it down below so you can seize the moment before the balance tips back.

The Housing Stock Is Way Up

The level of housing stock is one of the biggest indicators of the kind of housing market buyers and sellers are in.

And now, buyers have more housing choices than they’ve had since 2019.

There is roughly 4.3 months of inventory on the market, according to the latest data from the National Association of Realtors®.

“This is the longest stint of four-plus months of supply in five years,” says Hannah Jones, Realtor.com® senior economic research analyst.

That’s a huge shift from the conditions buyers have faced recently. And while it’s true that the number of homes on the market is due in part to slower sales activity, there are plenty of fresh listings to choose from.

In fact, new listings rose by 4.9% from the previous year.

Why More Housing Stock Matters

More homes for sale indicates a basic economic principle of supply and demand. For the past few years, there haven’t been as many homes on the market to meet the pent-up desire for housing stock.

“Those days are over,” says real estate professional and attorney Bruce Ailion, of Re/Max Town & Country in Atlanta.

“For years, buyers have complained there is no selection, inventory is so slim that multiple offers above list price is the only way to get a home, and too often, they had to compromise just to buy,” adds Ailion.

When inventory rises, buyers gain an incredible advantage.

“More homes on the market mean more choices, which is crucial for finding the right property with the features and amenities you want,” says Mike Wall, CEO of eXp Realty/EZ Sell Homebuyers in Dayton, OH.

A family he recently worked with had a specific wish list, including a large backyard for their kids, a home office, and a finished basement.

“In a tighter market, they might have had to compromise on one or more of those features,” says Wall. “But with today’s higher inventory, they were able to tour multiple homes that met their criteria. Ultimately, they landed a property that checked every box—without exceeding their budget.”

More Housing Stock Means An Increase In Price Cuts

A rise in housing stock puts pressure on sellers to cut prices to differentiate themselves in a crowded market.

The median home price in October dropped to $424,950—and with an increasing number of homes available, sellers are having to lower prices even further to stay competitive.

“The percentage of homes with price reductions was 18.6%,” says Realtor.com senior economist Ralph McLaughlin in his recent analysis. “What’s more, the overall share of inventory with price cuts is 2.2% higher than the shares seen between October 2017 to October 2019.”

Wall recently worked with a buyer who had been watching a home for weeks.

“The price was initially set too high, and as a result, the property didn’t receive much interest,” he says. “After two price cuts totaling nearly 10%, my client swooped in and made an offer below the asking price, which the seller accepted without hesitation.”

The seller even agreed to cover part of the closing costs—a clear sign of their motivation.

Along with closing costs, other things sellers might be flexible on include “point buy-down, seller credits for repairs and upgrades, and rent-backs if buyers aren’t quite ready to move in.”

Buyers Have Time To Make Offers

In addition to higher housing stock, there are other buyer-friendly market trends.

Now is “the slowest seasonal market in five years,” according to Realtor.com economist Jiayi Xu.

The market is moving at a snail’s pace, with homes spending 58 days on the market in October—the slowest October since 2019.

A week more to shop for homes eases buyers’ pressure to make quick decisions.

Andrew Fortune, who runs the real estate brokerage Great Colorado Homes in Colorado, had a recent client who had been burned in the frenzy of the 2020–22 market, losing out to cash buyers on several homes.

“This time around, they were able to revisit a home multiple times, bring in a contractor to check for potential upgrades, and even negotiate repairs—all because the seller was willing to wait for a solid offer,” says Fortune.

On The Brink Of A Buyer’s Market

While the data does not yet justify a true “buyer’s market,” according to Jones, it does suggest the market is balanced. This means “buyers are in a better position than they have been in years. ”

If seller activity continues to exceed buyer activity and housing stock continues to build, the market might finally start to lean more toward a buyer’s market, which would be music to homebuyers’ ears.

“For buyers who have been waiting on the sidelines, now might be the perfect time to make a move,” says Wall. – more at realtor.com

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