In real estate, ebbs and flows in the market are normal. Typically, the summer months are slower-paced than the traditionally busy spring. But this isn’t a typical summer due to the noteworthy characteristics of this year’s summer housing market. As the economy rebounds and life returns to normal, the real estate market is expected to have a powerful summer season.
Here’s how this summer is stacking up against the norm and what it means for you. (Click here to see the graph.)
Inventory is increasing
[See Months Inventory of Existing Homes for Sale in Graph.]
According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), inventory levels have risen since February. The graph below shows a clear upward trend, as shown in the green bars. There’s roughly 2.5 months’ supply of homes for sale. And while inventory is trending up as more houses come to the market, it’s still much lower than several previous summers, as the orange bars indicate.
If you’re looking to buy, some relief is coming in the form of more homes coming to the market. Remember, we still have less inventory than the norm, so be patient in your search.
If you’re thinking of selling, now is the time. Please work with your agent to list your house before it is overcrowded with competitors.
Time on the market is still shorter than usual.
Unlike the typical summer trend, time on the market is moving at the fastest speed we’ve seen since NAR started collecting this survey-based information in 2011. The most recent Realtors’ Confidence Index shows that the average home is on the market for just 17 days, as shown in green in the graph below. This means houses are selling much faster than a typical summer, which the orange bars represent.
[Understand “Average Days on the Market” via Graph.]
If you’re looking to buy, you need to be prepared to move quickly. Brace for a quick pace and rely on your agent to stay informed about the available homes in your area.
If you’re considering selling, data shows your house will likely sell quickly. If you’re worried about where you’ll go once your house sells, consider a newly built home as a good way to move up.
Price appreciation is still rising.
Home price appreciation is the last significant factor making this a robust market this summer. According to the State House Price Index from the Federal Housing Finance Agency (FHFA), we’re currently experiencing double-digit house price appreciation and have an average of 12.6% appreciation across the country. The graph below uses data from NAR to show a more granular view of how prices have changed month-to-month over the past few years. The green bars show the current price appreciation we’re experiencing today. Our current levels are well above what we’ve seen in recent summers, as indicated by the orange bars.
[Learn “Median Home Price for All Housing Types” via Graph.]
Competition and bidding wars drive prices up if you’re looking to buy. Getting pre-approved can show the seller you’re serious and help you know what you can afford. Once you do, work with your agent to make an outstanding firm offer.
If you’re considering selling, seize this opportunity to use your additional equity from this price appreciation to power your next move.
Bottom Line: What Are Experts Saying
This isn’t a typical summer. Whether you’re buying or selling, let’s connect with real estate agents in Chicago at KM Realty Group LLC to discuss how to capitalize on today’s market conditions to sell your house or find your dream home.
