You’re likely still seeing headlines and groups discussing what’s going on in today’s housing market. While the market remains hot, there have been some slight changes over the past few months to taper the all-time highs seen earlier this year. Chances are, you’ve even come across terms like cooling or slowing on some of the larger non-industry specific news sites.
Clients may even end up asking you “what do these terms mean?” The housing market today is still anything but normal, and it’s still an incredibly strong sellers’ market, especially when compared to the few years leading up to the pandemic. With that in mind, it’s often helpful to contrast the current market to past conditions when explaining what’s going on to your clients.
We’re Still Seeing an Above Average Number of Sales
Your clients may see headlines about a drop in home sales. But are those headlines telling the full story? The most recent Existing Home Sales Report from the National Association of Realtors (NAR) does show a drop of about 2% from July to August. But the month-over-month decline doesn’t provide the full picture (see graph below):
As the graph shows, historical context is key. Today’s home sales are well ahead of some of the more normal years that led up to the pandemic. That means buyers are still in the market, which is great news if you’re working with someone who’s hesitant to list their home.
Homes Are Selling Faster Than Usual
When headlines mention the market is slowing, sellers may naturally wonder if their house will sell as quickly as they’d like. According to the most recent Realtors Confidence Index from NAR, homes are still selling at record speed (see graph below):
Again, if we look back at data from previous years, we can see the current average time on market – 17 days – means homes are selling faster than a normal pace.
Bidding Wars Are Still the Norm
The previously mentioned Realtors Confidence Index from NAR also shows a drop in the average number of offers homes are receiving in August, and many headlines may simply focus there without providing the important context (see graph below):
Again, it’s important to compare today’s market to trends from recent years. Currently, the average number of offers per listing is higher than 39 of the previous 45 months. That means the likelihood of a bidding war on your home is still high. Although the days in recent memory of receiving 15+ offers may be over, an average number of nearly four offers still facilitates the opportunity for competitive offers to be submitted.
So, Is the Market Slowing Down?
While there are slight declines in various month-to-month data points, it’s important to keep a historical context in mind when determining what’s happening in today’s market. Odeta Kushi, Deputy Chief Economist at First American, put it best recently, saying:
“It’s not the white-hot market from earlier in the year & it’s not the 2020 market benefiting from a wave of pent-up demand but make no mistake this is still a hot housing market.”
Don’t let current headlines deter your clients from listing their homes this fall. Selling today means they can still take advantage of high buyer demand, multiple offers, and a quick sale.