The housing market has seen an astronomical boom over the past few years driven in large part by a Baby Boomer generation looking to downsize, younger generations looking to buy their first homes, and a pandemic market that has changed buying behavior due to work and family dynamics. All of these factors and many more have resulted in one of the biggest housing market booms since the pre-2008 market crash.
Recent indications, however, are trending that the market is cooling down. High prices are moderating slightly, but demand for homes is still at all-time highs and the market is still geared towards sellers. With things changing from peak highs, here’s what sellers need to know in today’s housing market.
Sellers Still Have the Power
Just because things have cooled down slightly in the market, sellers still hold the upper hand in the marketplace. Generally speaking, there are two to three buyer personas looking to purchase the same house: Baby Boomers looking to downsize, 20 and 30-somethings looking for their first home, and parents looking to purchase a home for a college-aged student as a future rental.
Because so many buyers are in the marketplace, sellers basically have their pick of the crop and can control the market in terms of prices and how they choose to go about marketing and listing their properties. News outlets have gone as far as calling this current market a “housing crisis” due to the shortage of home inventory, but for now, the “crisis” remains fully under the control of sellers.
Pricing is Still Powerful
Many sellers have cashed in on the housing shortage by taking advantage of arguably inflated selling prices due to higher than normal demand, but pricing a home still comes with some considerations. You can’t simply price a home tens of thousands of dollars above the market rate and expect someone to buy it for a king’s ransom of a profit.
Early in this recent housing boom, about half of all homes sold above the asking price, but that number has declined in recent months to something closer to 40%. In either case, buyers are willing to make competitive offers on a home, but a lot of that depends largely on the initial listing and asking price of the home. It’s important to price your home fairly but aggressively as a way to attract buyers. When the bidding war starts, you can really make some waves!
Patience Is Crucial
Some sellers look at the current market as a way to profit off of their home purchase, and for many homeowners who have had their home for 10 or more years, a princely profit could be in store. However, it’s important to keep in mind that selling in our current market could mean buying at the same or higher price in the event that you’re looking to upgrade homes.
Knowing that, it’s important to remain patient, stay the course, and entertain multiple offers for your home. Buyers are aggressively seeking a home to purchase and it seems prudent to sell at the nearest opportunity, but a few months of patience in the marketplace could give you a future home as well as a profitable sale without putting too much strain on your financials or your family.