Given the approaching spring and summer seasons, current market conditions and a slight increase in consumer confidence, it is not unusual to be noticing more offers on property listings.
In this article, we will take a look at reasons why properties, both newly listed and sitting on the market for 90-plus days, are suddenly getting multiple offers.
Supply and demand
Late spring and early summer are generally the best times to sell a house.
With the expected uptick in home buying that comes during spring, low inventory remains a challenge for potential homebuyers.
According to the U.S. Department of Housing and Urban Development March 2023 update, the inventory of new homes for sale on a national level fell 0.7% month-over-month at the end of February, and available existing homes for sale remained unchanged month-over-month.
Unsold inventory in the U.S. represents a 2.6-month supply, down from the 2.9-month supply in January.
For San Diego County, the inventory levels are even less, amounting to a 1.1 months supply for single-family homes and a one month supply for condominiums, according to the Greater San Diego Association of REALTORS’ Housing Supply Overview for March 2023.
Downward trending mortgage rates
However, downward trending mortgage rates in recent weeks seem to be coaxing more buyers to get in the game.
According to the Primary Mortgage Market Survey by Freddie Mac, the 30-year fixed-rate mortgage as of April 6, averaged 6.28%, down from the 6.32% it averaged the week prior.
This is still much higher than the 4.72% average at the same time a year ago, yet recent activity has shown a downward trend.
The combination of low inventory and declining mortgage rates in recent weeks contribute to a market where new properties, as well as those sitting on the market for 90 plus days, are getting multiple offers.
This is also an ideal time for investors to turn a profit on real estate investments due to the low inventory and high demand. Because of this, property owners may be getting unsolicited offers.
Slight increase in consumer confidence
The Fannie Mae Home Purchase Sentiment Index (HPSI), which is a composite index made to track consumers’ housing-related attitudes, intentions and perceptions using six questions from the National Housing Survey, increased 3.3 points in March to 61.3, even though the index still remains only slightly above its all-time low from late last year.
This consumer confidence increase for March hinged on the month-over-month increase of four of the HPSI’s six components: selling conditions, home price outlook, mortgage rate outlook and job loss concern. Most notably, when weighing consumers’ attitudes and perceptions of home buying conditions, there is a positive percentage point trend with home-selling conditions and sense of job security.
The net percentage of those who say it’s a good time to sell increased by 8 percentage points month-over-month to 18% in March.
The net share of employed consumers who said they were not concerned about losing their job increased by 7 percentage points to 57%.
Market in great condition for sellers
The market is in great condition for those looking to sell due to a lower inventory and a strong demand for housing. Additionally, with an increase in the sense of job security in March, consumers may be more willing to make offers on houses.
Whether you are interested in taking advantage of the high demand for housing and want to sell, or are looking to place an offer on a property, it is important to have a real estate advisor who can help guide you through the process.
If you would like to discuss a strategy for buying or selling your home in this shifting market, please don’t hesitate to call, text or email me today! (619) 568-0568. I am here with expert advice to help you avoid buyer’s fatigue and navigate the market.
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