Is the Seller's Market Slowing Down? What Buyers and Sellers Need to Know About the Shift Toward a Balanced Market

If you've been following the housing market over the past few years, you've likely noticed that sellers have been in a strong position. But with inventory on the rise, could that be changing? Here's a closer look at what you need to know.

What Is a Balanced Market?

A balanced market is typically defined as one with a five-to-seven-month supply of homes for sale. In this scenario, neither buyers nor sellers have a clear advantage, leading to more stable prices and a healthier selection of available homes. After years of sellers dominating the market, a shift toward balance would be a welcome change for many buyers. But are we really heading in that direction?

At the beginning of the year, the national supply of homes was around three months. Since then, it has increased to four months. While that may not seem like a huge change, it indicates that the market is moving closer to balance, even if it's not quite there yet. Importantly, this increase in inventory isn't causing an oversupply that could lead to a market crash. Despite the recent growth, there still isn't enough supply for that to happen.

For now, we're still in a seller's market, but it's not as intense as it has been in recent years. As Mark Fleming, Chief Economist at First American, notes:

"The faster housing supply increases, the more affordability improves and the strength of a seller’s market wanes."

What This Means for You

Here’s how this shift could affect you, whether you’re buying or selling. Lawrence Yun, Chief Economist at NAR, explains:

"Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis."

Homes Are Staying on the Market Longer:

With more homes available, properties aren't selling as quickly. This gives buyers more time to find the right home. For sellers, pricing your home correctly is crucial to ensure it sells, as buyers now have more options to consider.

Sellers Are Receiving Fewer Offers:

As a seller, you may need to be more flexible with pricing or terms to close a deal. For buyers, the reduced competition means you have more leverage and more options to choose from.

Fewer Buyers Are Waiving Inspections:

Buyers now have more negotiation power, which is why fewer are waiving inspections. For sellers, this means being prepared to negotiate and address any repair requests is important to keep the sale on track.

How a Real Estate Agent Can Help

Keep in mind that these trends reflect the national picture, and local markets can vary significantly. That's why it's essential to rely on a local real estate agent for insights into your specific area.

Whether you're buying or selling, staying informed about these market changes gives you a major advantage. Your real estate agent has access to the latest data and local market knowledge, ensuring you understand what’s happening and how to navigate it effectively.

Bottom Line

The real estate market is constantly evolving, and staying up-to-date is crucial. Whether you're planning to buy or sell, understanding the move toward a more balanced market can be beneficial. If you have any questions or need expert advice, don't hesitate to reach out to me!