Snapshot of the Housing Market: Stay Tuned for Changes

Snapshot of the Housing Market: Stay Tuned for Changes

When it comes to finding the appropriate way to describe today’s fast-changing housing market, many are at a loss for words. Still, they try. This past summer it has been called everything from red-hot to insane to brutal. According to Realtor’s Judy Dutton, however, the latest word is as shocking in its tepidness as it is in its long-lost familiarity: balanced.

Realtor economist Jiayi Xu used the term in a recent analysis, noting that his weekly data suggests that the U.S. housing market keeps progressing toward a more balanced market. But he is not the only expert that has remarked on the market’s more even-keel turn.

Bankrate’s Greg McBride chimes in: “Selling prices will level out as the market cools but this cooling is just a return to the type of balanced market that has been absent the past couple of years.”

First American’s Mark Fleming adds, “What goes up, must eventually moderate… As some buyers pull back from the market due to affordability and supply constraints and as new construction adds more supply, house prices will moderate, resulting in a more balanced housing market.”

And Realtor’s own Danielle Hale explains, “The early 2022 enthusiasm that homeowners had toward selling is evaporating as the housing market rebalances.”

So what does this mean for today’s buyers and sellers? It means a seismic shift is occurring. And while we are not yet into full buyers’ market territory, we have begun heading toward a middle ground that puts buyers and sellers on more even footing.

Dutton elaborates on this, saying, “Over the past two years, the pace of real estate sales has sped up significantly. Nationally, homes are on the market a median of 35 days before getting snapped up. But this rush is waning.” She goes on to say that for the week ending Aug. 20, properties spent four extra days on the market compared with this time last year. That may sound negligible to many, but even an extra four days doesn’t happen in a vacuum. “For the fourth week in a row, homes are sitting on the market for a longer time than last year,” adds Xu. “As both buyers and sellers adjust to the rebalancing market, expectations shift, reducing the sense of urgency in the market and reinforcing the trend toward longer sale timelines.”

Home sellers are also dragging their feet in the market, with Dutton reporting that for the week ending Aug. 20, the number of new listings dropped by 12% from a year earlier. Xu adds, “This week marks a seventh straight week of year-over-year declines in the number of new listings coming up for sale, and a second consecutive week with double-digit declines. This pullback from sellers could slow the speed at which the housing market rebalances,” says Xu. “Buyers looking for more bargaining power may need patience.”

Dutton acknowledges that the deep irony in listing skittishness is that sellers still stand to make bank, since home prices continue to soar through the roof. “Currently, property asking prices clock in at a median of $449,000 nationwide. And for the week ending Aug. 20, home prices shot up by 14.4% over that same time period last year.

With interest rates up, prices fluctuating, and inventory down, it may mean that everyone now has time to stop and smell the coffee, perhaps going back to revisit listings they may have once passed up. Dutton concludes, “Moving is not a process to be rushed, and a more deliberate, level-headed, and balanced housing market may do us all a world of good.”