The days surrounding the holidays are always an interesting time. The kids are home from school, you may be traveling to see relatives, and you may be out of the office for the week. So, what is happening with the housing market during this time period?
Today we’re taking a look at what we’re currently seeing in terms of supply and demand trends and what that means for you as a homebuyer.
What We’re Seeing for Supply
If you’ve been house hunting the past few weeks, we know that finding those homes that meet your criteria may have been a challenge. While winter months typically result in a slow in buyer activity, inventory continues to be a challenge as we start off 2022. The inventory levels are still outmatched by the number of eager buyers currently in the market. According to a report released by Redfin, new listings dropped to their lowest point since January in the four weeks leading up to December 26th. Active listings were down 26.1% year over year and were down 44.8% from 2019, according to the report. During this time, the median home sale price also rose 14.6% to a new high of $361,171.
What We’re Seeing for Demand
While pending sales also dropped to their lowest point since January, according to the Redfin report, this was likely due to the holiday season. Redfin Deputy Chief Economist Taylor Marr explains that the holiday effect of both homebuyers and sellers diverting their attention to holiday festivities and traveling resulted in a slowdown. This year, Marr points out that this shift was even more extreme than the pre-pandemic Christmas week of 2019. This temporary drop in activity is a consequence of this holiday time period rather than homebuyer demand backing off.
In fact, the buyer demand remains strong, with homes averaging just 26 days on market, down 33 days from 2020 and down 50 days from 2019. Additionally, the number of homes that had an accepted offer within one week of hitting the market was up 25.3% compared to last year and up 15.8% from 2019.
What This Means For You
With a dip in inventory levels around the holidays, it may seem a bit more challenging to locate that perfect home. However, don’t get discouraged! Now is the time to make a plan with your trusted agent on how to seek out new opportunities, such as off-market listings, and understand your priorities.
As the year continues, more options will continue to become available to you. This will be in part due to an increase in new construction availability. However, as time passes, mortgage rates and prices will increase, becoming the main concern with putting off your home search until later this year. Redfin’s Chief Economist, Daryl Fairweather, explains that:
“With more sellers expected to enter the market as buyer competition remains fierce, we anticipate strong home sales growth. Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise.”
If you’re trying to beat the crowd, and the interest rates, don’t give up on finding that dream home! Work with your trusted real estate advisor to come up with a strategy to help you stand out from the competition and find those new listings as soon as, or even before, they hit the market. Additionally, experts predict home prices are predicted to appreciate by an average of 5.1% through 2022, meaning that by purchasing today, you have a fantastic chance to build up equity through the next year. There is opportunity out there, just remember to stay patient and keep persevering.
Buyer demand is still strong, and with a dip in inventory, we know that it can get discouraging house hunting during these winter months. While we understand that it’s not easy, persevering now can result in you finding that dream home before those interest rates and prices climb. While it may become easier to find a home later in the year, by working with a trusted real estate agent now to refine your home search strategies, you may be able to locate that dream home sooner than you think. Now is the time to talk to your agent about the tools that they have available to help you get an edge on the competition, and get into that home before those spring flowers start to bloom.