Though pandemic-related affairs have started to settle as we head into 2023, the real estate industry is still nowhere near normal. In this article, Andrew Shader takes a deep dive into the current state of the housing market and what it all means for buyers and sellers.
The pandemic brought about a lot of change in a variety of industries, and local and national real estate markets are no exception. If you were in the market to buy or sell a home in the past couple of years, you know firsthand how housing costs began to climb rapidly and a shortage of available homes gave sellers a significant amount of leverage.
Supply Is Increasing but Still Too Low for a Buyer’s Market
If you’re planning on buying or selling a home, you’re likely tracking housing trends to find out whether we’re currently in a buyer’s market, a seller’s market, or a neutral market.
A buyer’s market favors the buyer because the number of homes available is greater than the number of people looking to purchase a home. A seller’s market favors the seller because the people looking to purchase a home outnumber the homes available for purchase.
A neutral market occurs when the number of homes available and the number of interested buyers relatively balance each other out.
The housing market has been leaning well into the realm of a seller’s market based on supply vs. demand over the past several years, and the pandemic only increased this direction.
Recent trends are showing a gradual shift back toward buyers having the upper hand. However, based on just how deep the market has strayed into a seller’s market, it will take some time for the number of buyers vs. available homes to balance back out completely or even tip back into the realm of a buyer’s market.
In summary, although the housing market is currently trending back toward the buyer, this trend has not yet moved far enough for it to be a true buyer’s market. According to Andrew Shader, sellers still have the upper hand and likely will for some time.
In fact, 39% of homes sold for more than the seller’s asking price in July of 2022 alone, cementing the reality that buyers are paying top dollar for the right property in the current climate.
What Does This Mean for Buyers?
If you’re a prospective homebuyer in the current market, you may have trouble finding a property that fits your budget, especially as mortgage rates are rising while home inventory continues to be low. Now is certainly a better time to be a buyer than 2020 or 2021, but it may be a while before the market trends back toward the buyer’s advantage.
About Andrew Shader
Andrew Shader is a Fort Lauderdale-based real estate investor and developer who began as an insurance entrepreneur before discovering his passion for real estate. Today, he helps clients of all lifestyles and budgets achieve their ideal outcomes when buying or selling their homes.