It’s a Seller’s Market!
The seller’s market continues! In the past year we have seen prices continue to climb and inventory continue to shrink. Time on market for homes has continued to go down for the most part. Just as we were beginning to see things stabilize a bit locally, we started to see stock market decreases, a war between Russia and Ukraine, and rising interest rates. While the combination of events seems to have caused people to pause a bit, it seems that it really is just a pause to regroup.
Homes under $300,000 still are typically on the market only a few days before they are under contract. Many homes between $300,000 and $600,000 still sell quickly as people moving into Wyoming from other areas are bringing a fair amount of cash to support their purchase. Homes over $600,000 do still take a bit longer to sell, but even so those homes still sell much quicker than they did prior to 18 months ago.
So why with so much going on and interest rates rising, are we still experiencing a seller’s market? In listening to experts in the field and reading reports, it seems several things are contributing.
- The single largest factor is plain and simple supply cannot keep up with demand. The Millennial Generation is our largest population (yes even larger than the Baby Boomers). They are getting married, having kids, getting settled in careers and ready to invest for their future. Many of them are choosing to invest in purchasing a home. So, a previous housing shortage has now been amplified for a larger demand for housing. And adding to this factor is builders having a tough time keeping materials flowing in. Due to supply chain issues, or just due to again more demand than there is supply? Who knows, but either way it is a contributing factor to how quickly houses can be built.
- While stock markets and interest rates are generally certainly a factor in how confident people feel about purchasing property, it seems that at this time most people are not changing their plans. Those that plan to buy still plan to buy. What may change is how much they can spend on a home or how long they will have to wait to purchase. Most people seem pretty content with the idea that they may need to make some monthly spending adjustments to make up the difference in what they pay on a monthly mortgage payment due to increase in interest. As an example, a $300,000 mortgage at 4.5% for 30 years is $1520. That same amount for 30 years at 5.5% is $1703, less than $200 a month different. Many people can find ways to save $200 a month if it means getting into a home they want.
- Locally another large contributing factor to the seller’s market is that for years many people wanted to move from larger areas to Wyoming but the jobs were not to be found to support the move. Since COVID, many more people have the option to live where they want and take their job with them. This has opened up a lot of freedom for people to choose where they want to live and have the financial means to do so.
Bottom line, if you are in the market to sell, it is still a good time to do so. You do need to have a plan for where you want to be next. If you are hoping to sell one place and purchase one that is somewhat similar, it may be difficult to do. If you are looking to downsize, it is a good time to do that. And because it is a seller’s market, it is also a good time to be looking to put an offer in on the a place you want as long as you have a solid house-sale contingency in place. Because properties sell quicker than they used to, this isn’t such a scary prospect for a seller at this point.
If you are ready to buy, it is still a good time to do that. Be sure to have talked to a lender if you need one so that you are ready and able to move on the property you like. They do sell quickly and those that have their ducks in a row are more likely to be successful in multiple offer scenarios. From the sounds of things, interest rates will continue to rise. So, don’t buy so quickly that you end up with a house you don’t like, but do be prepared to move on the one you do like so you can take advantage of lower rates while they last.
And buying or selling, interview a few Realtors until you find one you feel confident in. That person will be a great member of your team, ensuring that you are well taken care of throughout the process.