by: Danielle Webster/Realtor
WHAT TO EXPECT THIS FALL IN THE HOUSING MARKET
The housing market has been on a wild roller coaster ride for the past two years, and while it appears to be on its last loop no-one really knows for sure. Some experts say we can expect mortgage rates to rise all the way through the end of 2023, others believe it will cool off or correct itself due to how much the mortgage rates have already climbed. The answer may lie somewhere in the middle or even vary depending on your specific local market.
Here in Huntsville AL, North Alabama for anyone not familiar with the state, we have a very hot real estate market. Even with interest rates just over 5% there is strong demand for homes that are priced right. The median price tag for homes in this area are right around $316k which is an increase of 14.8%. In this market, you will get 100.2% of your asking price, which has decreased 1.2% for Huntsville home owners, when pricing at fair market value. The average days on market for the month of July was just twelve days. In August it decreased 60% to only six days from listed to under contract. It comes down to supply and demand, we have a little less than a two month supply of homes which is up 72.7% from 2021 according to HAAR (Huntsville Area Association of Realtors). We are making improvements with new construction but that is still a ways from the 5-6 months supply needed to change the landscape into a more buyer friendly market. However, the market is changing, new listing decreased 19%, pending sales decreased 11.8%, and inventory increased 60.3% for the last week of August 2022.(HAAR)
The biggest shift is the housing affordability, according to NAHB/Wells Fargo housing opportunity index, during the first quarter for sale homes affordability was 56.9% and has now dropped to its lowest levels since the Great Recession at 42.8%. The housing affordability index is a way to measure the affordability for the region. For example, an index of 130 means that the median household income was 130% of what is necessary to qualify for the median-priced home under prevailing interest rates. A larger number means greater affordability. The affordability factor, higher interest rates, mixed with the uncertainty of the market has home buyers and sellers pausing and second guessing if now is the right time.
It's hard to predict where the housing market will be next week, not to mention next month, but if you are thinking about buying or selling a home right now just make sure you are in a position to do so financially, physically, and emotionally. There is more inventory, which means competition for sellers, and more options for buyers. The supply of homes and new construction being added to the market should continue to rise. Talk to a real estate professional and find out what options you have and design a plan that fits your needs. The wait and see strategy is a gamble that doesn't always pay off, imagine waiting for rates to drop but instead they rise you out of your original price range, or you wait to put your home on the market with hopes of a repeat of all the bidding wars that took place last year to discover the market is flooded with homes. The right time to buy or sell a home is not a one size fits all, but if you are ready willing and able to embark on the real estate journey there is no time like the present, because no-one knows what the future holds.
If you have any questions or need assistance with your real estate goals contact me today!
