Listing Inventory is finally returning to the white sandy beaches of Destin, Florida. But perhaps not in the form that the angel hotspot’s real estate agents would prefer.
With mortgage rates marching toward 7% and home prices still higher than they were this time last year, homes just aren’t selling as fast as they used to (or not at all). inventory is get old-fashionedand you won’t find many newcomers.
More and more sellers are listing their homes solely because they are absolute have tosaid Jordan Dennis, an agent for Century 21 in Florida’s Panhandle.
As concerns arise among potential sellers and brokers, the number of new listings launched has fallen to new lows. During the four-week period ended Sept. 18, new vehicle registrations nationwide fell 20% from a year earlier redfin. It’s the biggest annual drop since May 2020, when lockdowns froze the housing market.
In addition, the stock of existing homes for sale in August fell 1.5% from the previous month to 1.28 million homes, according to the latest report from the Federal association of real estate agents.
“The slump in new registrations is hampering housing supply growth, which is keeping house prices relatively high even as the market slows,” said Taylor Marr, Redfin’s deputy chief economist, in a statement. Housing supply would typically increase during a downturn, Marr noted.
FOMO (fear of missing out) and cheap debt that fueled record activity during the boom years have been replaced by FOBATT (fear of buying on top) and expensive financing that have paralyzed the housing market.
“Sellers feel like they’re late to the party and the terms are unfair and they wish they should have made the listing decision sooner,” said Mike Wood of Reno, Nevada RE/MAX Agent.
“Many sellers are reluctant to sell because they don’t know where they are going to move,” said Michael Nourmand, president of brokerage Nourmand & Associates. “Also, if they buy a more expensive home and lock in a low interest rate, their annual property tax would increase, so their monthly payments will increase with their new loan.”
Around 85% of US homeowners with mortgages have a mortgage interest rate below the current level of 6%. And more than two-thirds have a mortgage below 5%.
With the federal reserve With the federal funds rate raising 75 basis points this week and more hikes forecast in the future, mortgage rates are expected to continue to rise, possibly in the 7% range. Homeowners will continue to be discouraged from selling and buyers’ purchasing power will continue to decline.
In such a brutal environment, seller agents say the key to successfully handling a listing is managing seller expectations.
“You have to be really transparent and show them the numbers and show them how much it’s changed,” says Megan Lowe, a Reno resident Chase International Real Estate agent said. “I’ve told sellers to be prepared that – if we’re lucky – they won’t see anything for up to 14 days. If an offer is displayed, it is always within this time frame of 14 to 18 days. But we don’t get 20 screenings on the first day anymore, at most four or five screenings in a week or so.”
For Dennis, those longer time horizons meant he had to list properties much sooner than he would have previously.
“Less than a year ago you could place a listing and the next day it would be agreed, but now things are slowing down and we are listing well ahead of schedule,” he said.
As always, price is key. Vendors who have witnessed neighbors selling homes for the highest dollar in recent years are reluctant to list at a discount even when the market has turned, agents said.
“When my sellers are ready, I encourage them to start at the bottom end of what’s sold in the last three months and then also look at what’s on the market now and price accordingly,” said Christina Ward, a Boise, based in Idaho Keller Williams Agent. “We’re still in a rising market, it’s just gaining slower than last year.”
Despite the market slowdown, agents said it’s still a decent time for a listing. This message to potential sellers is important.
“There is a fear that the market will collapse and that is not the case. What’s happening is everything is going back to normal,” Dennis said. “It reminds me of five years ago. There is inventory and there is no shortage of buyers, agents just have to go out and find them.”
Los Angeles-based Nourmand added, “Agents need to spend more time prospecting. For most experienced agents, this means spending more time working in your circle of influence. For newer agents, this means spending more hours doing things like open houses, knocking on doors, and making cold calls.”