The local and national real-estate markets are moving from a Covid-caused home-appreciation frenzy to a more balanced market. While homes for sale remain in short supply locally, days on market are increasing steadily, as are normal price decreases. And multiple-offer situations are rare – not the rule.
Purchase applications for mortgages have increased over the last few months and weeks, meaning that more and more buyers intend to purchase. These buyers are convinced that mortgage rates are not declining any time soon, and/or that they possess the financial financially to make a move – even with increased prices.
Except for greedy sellers who want top dollar and multiple bids on their homes, most people in the housing market are pleased to see a return to normalcy, says Housing Wire’s Lead Analyst, Logan Mohtashami. “20 offers on a house is not a good thing; it’s a problem.”
Does the data-driven Mohtashami think that we’re headed for a housing crash? No. Unlike the 2008 crash, homeowners still have lots of equity in their homes. Foreclosures and short sales are virtually non-existent (although a slight uptick is trending).
Mohtashami argues that a balanced real-estate market, typically 6 months, is now actually 4 months. That means it will take 4 months for homes for sale to get absorbed by buyers, if no other homes came on the market. A balanced market means the number of homes for sale is roughly equal to the number of buyers, creating a stable market; neither buyers or sellers have a distinct advantage. In this scenario, prices tend to be stable, and homes stay on the market for a reasonable amount of time.
Mothtashami notes that Millennials, characterized by taking more time to have children and purchase homes, will contribute to the number of buyers seeking mortgages.
“Affordability is still tough, but it’s not holding buyers back,” he says.