A lot has changed over the past year, and you might be wondering what’s in store for the spring housing market. If you’re planning to sell your house this season, here’s what real estate experts are saying you should keep in mind.
- Houses That Are Priced Right Are Still Selling
Houses that are updated and priced at their current market value are still selling. Jeff Tucker, Senior Economist at Zillow, says:
“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.”
The need to price your house right is so important today because the market has changed so much over the past year. Danielle Hale, Chief Economist at realtor.com, explains:
“With a smaller pool of buyers today and more competition from other homes on the market, homesellers will likely need to adjust their price expectations in the market this spring.”
The chart above illustrates the pricing situation which the Southern California real estate market has undergone the last 6-9 months. When it comes to listing, many sellers are still in the mindset of pricing their home where the market was at July 2022. For those home owners, they may face an extended time on market coupled with multiple $10-$15k price reductions - which is what we are currently seeing as we move out of the Winter market.
The visual below helps summarize the impact your asking price can have:
- Buyers Are Still Out There
As mortgage rates have risen and remain volatile, some buyers have pressed pause on their plans. But there are still plenty of reasons people are buying homes today. Lisa Sturtevant, Chief Economist at Bright MLS, spells out the mindset of today’s buyers:
“For some buyers, higher mortgage rates simply means buying a home is out of the question unless home prices fall. For others, higher mortgage rates will be a hurdle but ultimately will not keep them from getting back into the market after sitting on the sidelines for months.”
The graph above by Keeping Current Matters illustrates buyer demand as rates fluctuate between 5.5% and 7.5%. Over the last few months we have touched both ends of the spectrum.
The Fed's decision to raise the federal funds rate by 0.25% on Feb. 1 after its latest meeting -- the smallest increase since March 2022 -- suggests that inflation may be cooling and the central bank may be able to ease up on its rate hikes, which could soften mortgage rates...
What does this mean for homebuyers this year? Mortgage rates are likely to decrease slightly in 2023, although they're highly unlikely to return to the rock-bottom levels of 2020 and 2021. However, rate volatility may continue for some time. "Expect mortgage rates to yo-yo up and down in the first half of the year, at least until there is a consensus about when the Fed will conclude raising interest rates," says Greg McBride, CFA and chief financial analyst at Bankrate. (Like CNET Money, Bankrate is owned by Red Ventures.) McBride expects rates to fall more consistently as the year progresses. "Thirty-year fixed mortgage rates will end the year near 5.25%," he predicts. More information by Matthew Graham, "The Fed Will Still Raise Rates in March, And That’s Why Rates May Keep Falling".
3. Skills Matter Now More Than Ever
A skilled realtor will take into account various factors, such as the local market conditions, recent sales in the area, and the competition, to determine the best price for your home.
One of the biggest risks of pricing a home inaccurately is that it can lead to it sitting on the market for a longer time, resulting in reduced interest from potential buyers. Moreover, underpricing your home can cause you to lose out on potential profits, while overpricing it can deter potential buyers from even considering your property.
In addition to pricing expertise, a skilled realtor will also have the necessary skills to market your home effectively. They will be able to highlight your home's best features and use various marketing techniques to attract potential buyers. This can include creating high-quality listing photos, virtual tours, and targeted advertising campaigns.
Bottom Line
Homes that are priced at current market value are still selling. To make sure you price your house appropriately, maximize your sales potential, and minimize your hassle, let’s connect.
- Kyle
