Dear Friends and Clients,
The real estate market may be cooling, but only slightly. Recent statistics show new listings increased by 4% in the four weeks ending July 4 compared to last year, and they increased 3% compared to this time in 2019. This is the first time new listings data has surpassed pre-pandemic levels.
If you’re worried you missed the sellers’ boat, don’t worry. Tim Ellis of Redfin Media says, “The market frenzy of 2021 has cooled somewhat, but home sellers are still very much in the driver’s seat in the housing market today.” We can see this in our rising prices. From this time last year, the median sales price has increased by 16%.
So supply is increasing, but prices continue to rise. What does this mean for the future? Here are three key takeaways from the latest data:
1. Supply is increasing, but it’s still low. New active listings are up 8% from their lowest point in March of this year, but our overall supply is still two-thirds of what it was a year ago.
If you are a seller looking to take advantage of the hot market, you aren’t alone. In fact, sellers trying not to miss out on high prices could be motivating the increase in supply. According to Redfin Chief Economist Daryl Fairweather, “This continued demand for homes is enticing more homeowners to sell in order to avoid the fear of missing out on historically high prices.”
Ironically, sellers’ enthusiasm to take advantage of the hot market could be contributing to the cooldown. However, it is unlikely this represents a large enough group to shift the market long term.
2. Buyer demand remains very strong. Homes remained on the market for an average of 18 days. This is down from the all-time low of 15 days we saw in June and July, but it is still far lower than the 34 days we saw a year prior. A lot of this change is seasonal, and some of it is buyer fatigue, but demand overall remains historically high.
Daryl Fairweather observes that “Demand for homes is making a comeback because even though home prices are high and competition is still steep, homebuyers don’t have many alternatives but to keep trying.” Combine this with low mortgage rates, and demand will likely continue to be historically high.
NAR’s director of housing and commercial research, Gay Cororaton, put it best: “We’re seeing the gap narrowing between demand and supply,” but “There’s still a huge, huge gap.”
3. Seasonal shifts might be smaller this year. We normally see the housing market cool in the fall as families prepare to send their kids to school and hunker down for the winter. However, the pandemic may have thrown this pattern off balance.
Senior Economist George Ratiu says he “expects an unusually busy fall season” this year. More people are vaccinated and feel comfortable going out into the world again. This means more open houses, more attendees, and more activity in general. “Sellers are putting homes on the market,” says Ratiu. “Normally this activity happens early in the spring.”
What does this all mean for you? While the market may be cooling, experts all agree: we’re still in a seller’s market. Demand remains high, and supply remains low, even if it’s not quite as low as it was previously.
If you’ve considered selling your home, you haven’t missed the boat. I encourage you to instantly calculate your home’s value in today’s market based on recent Northern Virginia / D.C. Metro area sales:
Enter your address here to find out what your home is currently worth
If you have any questions about our market or are thinking about buying or selling, don’t hesitate to call us at (703) 328-3434 or email us at janet@simplyyourbestmove.com. The market is changing, but we can help you navigate all the opportunities available to you.
We look forward to hearing from you.
