We are in a “Sellers’ Market! You have probably heard this term multiple times, but what is a Sellers’ Market? I have been asked this question many, many times so here goes…
A sellers’ market in real estate is a market in which the number of homes available for sale cannot satisfy the number of buyers who want to purchase a home.
In the past year, we have undeniably been in a sellers’ market on Long Island. A strong sellers’ market has resulted in many bidding wars with buyers finding themselves pitted against each other as they vie to purchase a home for their families. It has become common place for properly priced houses to receive multiple offers and interested parties engulfed in bidding wars. Home buyers have been faced with fierce competition and many have experienced being out-bid repeatedly before purchasing a home. Some buyers have become frustrated and have exited the market with the plan of re-entry later. They are hoping that at some point in the near future, the market will have enough supply to meet buyer demand.
A 6-month supply of available homes is considered a healthy market. According to the National Association of Realtors (NAR), there has not been a 6-month supply of houses for sale nationally since August 2012. The latest Existing Home Sales Report from NAR states that there is currently 3.7 months supply of homes for sale. What does this actually mean? This means that if the level of demand remains the same and no additional homes are listed, it will take 3.7 months to sell all the houses that are currently on the market. https://www.nar.realtor/research-and-statistics
Long Island communities have different levels of absorption time because of varying levels of supply and buyer demand.
What can we expect this year? Will we continue to have low supply and high demand? How will rising interest rates and the new tax laws, affect buyers’ ability to purchase homes? Will we continue to experience a sellers’ market throughout 2019? As Spring and the home buying season approaches, inventory in some neighborhoods is starting to increase while others continue to lag behind. Will buyer interest keep pace with the availability of inventory? Market predictors indicate that there will be a correction which will stabilize housing prices. As we enter the home buying season, timing will be of optimal importance to both sellers and buyers.