Homebuyers may find more housing options and less competition in coming months as more homeowners are gearing up to sell.
According to Realtor.com, 26% of homeowners surveyed this fall plan to sell within the next year, up substantially from 10% in the spring. Of those planning to sell, nearly half (46%) plan to sell within the next three months and 65% plan to sell within the next six months.
Any increase in inventory would be welcome in a market that has been strapped for supply throughout the pandemic. The imbalance between supply and demand has been a key driver of price growth and competition that has sidelined many first-time and low-income buyers in 2021.
Typically, homeowners are more likely to list in the spring as the weather gets warmer and homebuying activity increases. However, concerns over the economic climate and finding a new home kept many homeowners from listing last spring.
Concerns about the risks of selling increased slightly from spring to fall, but so did the prospect of being in control during the selling process. Ninety percent of sellers expected to impact the terms of sale — up from 73% in the spring. More than 40% said they would ask for more money than they think the house is worth.
For the most part, seller expectations align closely with recent seller outcomes. Nearly half (49%) of sellers got their asking price while 44% got above asking price — almost exactly the same share of sellers that said they will ask for more than what they think their house is worth.
|Experience||Share of recent sellers|
|I got my asking price||49%|
|I got above my asking price||44%|
|I sold below my original asking price||22%|
|I got an all-cash offer||23%|
|I had offers on the home I sold within a week||30%|
|Buyers were willing to forgo contingencies like inspections and appraisals to make the deal||28%|
|Buyers were willing to forgo concessions like repairs to make the deal||24%|
|There was a bidding war for my home||27%|
However, there seems to be a disconnect regarding how home repairs will be resolved during the sale. Nearly 35% of prospective sellers say they will not pay for improvements or repairs, while only 24% of recent sellers said buyers were willing to forgo repairs to make a deal.
While the housing market still heavily favors sellers, there have been signals that demand and prices will soften in 2022.
The rate of bidding wars fell to its lowest level of the year in September, indicating falling demand. And the Federal Reserve will begin tapering its “easy money” policies this year, which will drive mortgage rates up and likely further ease demand.
Finally, the Mortgage Bankers Association’s most recent forecast has home prices dropping in the second half of 2022, perhaps foreshadowing a re-balancing of supply and demand.
Homeowners may be sensing this trend and trying to sell their homes before their advantages start slipping away.
For homebuyers, the next few months — which are traditionally among the best to find a deal — may provide a window of opportunity to lock in a low mortgage rate while avoiding the fiercest competition. That opportunity could be even sweeter if sellers follow through with their plans to bring more inventory online.