Real Estate Market Forecast for Spring: Hot, Hot, Hot!
As we move through 2024, the real estate market shows no signs of slowing down. The market remains hot, with homes selling quickly and inventory levels at record lows. Buyers are advised to act swiftly and be well-prepared, while sellers should consider taking advantage of the current conditions before the market cools down later in the year. This guide will explore the current housing market, compare it to pre-pandemic conditions, and provide valuable tips for buyers and sellers navigating this dynamic market.
The Housing Market Remains Hot and Will Heat Up Once Again This Spring
Despite a decline in sales, the housing market remains hot. It will only get hotter for prospective homebuyers looking to purchase a home during the busier spring homebuying season. According to recently released data, the median number of days for a home to change from for-sale to pending status in the U.S. fell to 17 days in February, matching last year's tally. By the time this month's figures are released, that number could fall below two weeks, a week slower than 2022 and 2021 but a week faster than pre-Covid market conditions in 2019.
It might be even more challenging if a homebuyer waits to buy a house next month. Homes are selling very quickly, with most selling in less than two weeks. This is because there is a shortage of homes for sale. There is a need for about 6.5 million single-family homes. If you include multi-family homes, the shortage is about 2.3 million despite just 35.9 million of the 132.5 million U.S. households (27.1%) that can afford to buy the new median-priced home at $425,786 in 2023 (per the National Association of Home Builders).
There are a few reasons why there are so few houses for sale:
- One reason is the lock-in effect, 89% of those who have a mortgage have an interest rate below 6% APR. This means they would have to pay a higher interest rate if they sold their house and bought a new one. Therefore, they are less likely to list their homes for sale.
- Another reason is that more homes need to be built. The number of new homes being built needs to catch up with buyer demand. This is because it is expensive to build new homes. The cost of land, labor, and materials has gone up.
- Finally, many people who can afford a home choose not to. They may be worried about the economy or want to avoid taking on the responsibility of owning a home.
All these factors have contributed to the shortage of homes for sale. This has caused the price of homes to go up.
Today vs. Pre-Covid or "Normal" Market Conditions
The current housing market is in stark contrast to the pre-pandemic era. Back then, buyers had more time to search for a home and more options. Today, buyers must act swiftly to secure a property, as homes are selling at an unprecedented pace. This is especially true in the Northeast and Midwest. All of the 100 most populated cities in these regions (except Indianapolis) are seeing homes sell more quickly, with fewer homes on the market.
Eight of the top 15 fastest-selling metros were in the Midwest. In these markets, homes went from for-sale to pending in under 1 week and 6 were tied for the 10th spot, they were:
Homebuyers in these markets will want to make sure they have a game plan in place to move quickly when they find the home they want to purchase. They are likely to compete with other buyers and would benefit from competitive financing options such as NAF Cash to ensure their offer stands out from the crowd.
Tips for Buyers
In this competitive real estate market, buyers must be well-prepared to secure their dream home. Here are some crucial tips for buyers to navigate the hot housing market:
- Act swiftly and decisively: The current market demands prompt action. Homes are selling quickly, so buyers should be ready to move fast when they find a property that meets their needs.
- Obtain pre-approval for a mortgage: Getting pre-approved for a mortgage demonstrates your seriousness to sellers and strengthens your negotiating position. It also allows you to determine your budget and avoid potential financing delays.
- Be flexible with your closing date: In a fast-paced market, sellers often prefer buyers who can close quickly. If you can adjust your closing date, it can make your offer more attractive and increase your chances of success.
- Consider a home warranty: A home warranty can provide peace of mind by covering unexpected repairs and maintenance issues. This can be particularly valuable for buyers purchasing older homes or those who want additional protection beyond the standard seller's warranty.
- Stay informed about market trends: Keep yourself updated on the latest market trends, including price changes, inventory levels, and local regulations. This knowledge will empower you to make informed decisions and negotiate effectively.
Buyers can increase their chances of success in the hot spring housing market by following these tips and being well-prepared.
Tips for Sellers
Sellers should take advantage of the current hot housing market by selling quickly before the market cools later in the year. Pricing the home right is crucial, as an overpriced home may sit on the market and miss out on potential buyers. Sellers can offer incentives such as a lower price, a flexible closing date, or a home warranty to attract more buyers.
Preparing the home to appeal to the target market is essential, including making necessary repairs, decluttering, and staging the home to showcase its best features. Consulting with a real estate agent can provide valuable insights and guidance throughout the selling process, helping sellers navigate the market and achieve a successful sale.
Insights for Success
As we take a final look at the bustling spring real estate market, it's clear this season is all about seizing opportunities and making swift, smart decisions. Whether you're dreaming of buying a new home or looking to sell, the market's warmth offers something for everyone. So, dive in with confidence, armed with the insights and tips shared, and make your real estate aspirations a reality this spring. Here's to finding or selling your perfect home in the hot, hot, hot market of spring 2024!
NAF Cash is fulfilled by NAF Cash LLC, an affiliated real estate company of New American Funding that is managed and operated in compliance with applicable legal and regulatory requirements. NAF Cash LLC does not originate loans or issue loan commitments. Terms and Conditions apply. Not available in all states. MI Real Estate Broker #6502431375. 41050 W 11 Mile Rd, Suite 220, Novi, MI, 48375. Phone 844-344-0531.
NAF Homes, Inc. is an affiliate of New American Funding and does not originate mortgage loans or issue loan commitments. NAF Homes, Inc. is a MI Real Estate Broker #6505431109, Tel. 844-626-1300.