Summer Housing Market Is Heating Up
The real estate market typically follows a fairly predictable cycle based on the seasons. The slowest months of the year are the winter months. Home buyers and home sellers are busy with the holidays, so it is hard to fit in a home search or preparing a home for sale. On top of that, many families with kids are reluctant to move during the school year. All of this adds up to spring and summer months being the busiest time for the real estate market. This year’s market is different. Spring was much slower due to the pandemic. Many parts of the nation were just opening up after the winter wave that shut down large parts of our country. While summer has been busier, it is only just now really heating up. Why has the real estate market been slower this summer and why is it now picking up steam?
Why Have Home Sales Been Slower This Summer?
The numbers do not lie. Home sales have been slower in the spring and early parts of summer than in typical years. However, this is not due to a lack of demand. Many people want to buy a house and take advantage of low mortgage rates because they know these rates won’t last forever. The problem is the lack of supply. Home sales are slow because there is not enough inventory to meet the demand from all of the home buyers. The lack of inventory is making this summer seem a lot cooler than it actually is. However, it seems like we are at the end of this trend and the real estate market is really picking up.
What Can Home Buyers Expect the Rest of Summer?
Home buyers and home sellers should expect home sales to really pick up and should be ready to jump into the fray. The big reason why the real estate market is about to pick up with the summer heat is that inventory is increasing. Data from the National Association of Realtors shows that inventory has been steadily increasing since February. This is great news for home buyers who have been frustrated by the real estate market for the past year. More inventory means more chances to buy the house of your dreams.
There is data out there that seems to indicate the increase in inventory is already helping home buyers. One of the biggest frustrations home buyers have been facing over the past year is ferocious bidding wars. You could pretty much expect that most houses you were interested in would have multiple buyers putting in offers. This caused home prices to skyrocket and buyers paying more than the asking price. Bidding wars are still common, however, they are declining. According to data from Redfin, bidding wars decreased by nearly 10% from May to June.
The decline in bidding wars is great news for home buyers, but does it mean that we have reached the peak of the housing market? The answer is a resounding no. The real estate market has more room to run. First, bidding wars have not gone away, they have only decreased. About 62% of all home sales in June experienced a bidding war from buyers. This tells you that there is still plenty of demand. All this means is that instead of it being nearly impossible for home buyers to get the house of their dreams, it is now possible, just competitive.
Another way you can tell that we are not even close to the peak of the market is that home prices and values are still increasing. So far this summer we are seeing double-digit home price appreciation. Home prices are appreciating even as inventory is increasing. This tells you how much more demand is out there and will continue to be out there. You can also get a grasp on whether or not the demand is still enough to keep the market rising by looking at how long houses are on the market. According to data by the National Association of Realtors, the average home is only on the market for 17 days. Nearly every month, it seems that houses are being sold quicker and quicker. If we were at the peak of the market, we would start to see homes sitting on the market longer and longer.
Final Thoughts
This summer’s real estate cycle might have been kicking into high-gear a little later than we expect; however, it looks like it might be hotter than ever before. There is still a huge demand from home buyers and we are just now starting to see the inventory available to help meet it. Home buyers need to understand that the time to buy the house of your dreams is right now. There are more opportunities to buy a house now than there have been over the past year. Although, it is still a very competitive market, which means it helps to have every advantage possible.
One advantage that can really help is having a Massachusetts realtor who understands your needs and your market. This can help you find potential homes quickly and craft the perfect offer to beat out other buyers. If you are looking to buy a house and want a professional Massachusetts realtor who can help you, contact us. The team at Streamline Realty is here to do everything we can to help you buy the home of your dreams.
