More Listings Are Coming onto the Market [INFOGRAPHIC] Some Highlights Worried you won’t be able to find your next home after you sell? You should know data from realtor.com shows more listings are coming onto the market each month this year. Having additional options can make the search for your next home easier. But inventory is still low overall, which means your house should still stand out when you sell. If your biggest question is where you’ll go if you sell, take this as encouraging news. Let’s connect to start the process today.

Is the Housing Market Correcting? If you're following the news, all of the headlines about conditions in the current housing market may leave you with more questions than answers. Is the boom over? Is the market crashing or correcting? Here’s what you need to know. The housing market is moderating compared to the last two years, but what everyone needs to remember is that the past two years were record-breaking in nearly every way. Record-low mortgage rates and millennials reaching peak homebuying years led to an influx of buyer demand. At the same time, there weren’t enough homes available to purchase thanks to many years of underbuilding and sellers who held off on listing their homes due to the health crisis. This combination led to record-high demand and record-low supply, and that wasn’t going to be sustainable for the long term. The latest data shows early signs of a shift back to the market pace seen in the years leading up to the pandemic – not a crash nor a correction. As realtor.com says: “The housing market is at a turning point. . . . We’re starting to see signs of a new direction, . . .” Home Showings Then and Now The ShowingTime Showing Index tracks the traffic of home showings according to agents and brokers. It’s a good indication of buyer demand. Here’s a look at that data going back to 2019 (see graph below): The 2019 numbers give a good baseline of pre-pandemic demand (shown in gray). As the graph indicates, home showings skyrocketed during the pandemic (shown in blue). And while current buyer demand has begun to moderate slightly based on the latest data (shown in green), showings are still above 2019 levels. And since 2019 was such a strong year for the housing market, this helps show that the market isn’t crashing – it’s just at a turning point that’s moving back toward more pre-pandemic levels. Existing Home Sales Then and Now Headlines are also talking about how existing home sales are declining, but perspective matters. Here’s a look at existing home sales going all the way back to 2019 using data from the National Association of Realtors (NAR) (see graph below): Again, a similar story emerges. The pandemic numbers (shown in blue) beat the more typical year of 2019 home sales (shown in gray). And according to the latest projections for 2022 (shown in green), the market is on pace to close this year with more home sales than 2019 as well. It’s important to compare today not to the abnormal pandemic years, but to the most recent normal year to show the current housing market is still strong. First American sums it up like this: “. . . today’s housing market looks a lot like the 2019 housing market, which was the strongest housing market in a decade at the time.” Bottom Line If recent headlines are generating any concerns, look at a more typical year for perspective. The current market is not a crash or correction. It’s just a turning point toward more typical, pre-pandemic levels. Let’s connect if you have any questions about our local market and what it means for you when you buy or sell this year.

What Does the Rest of the Year Hold for the Housing Market? If you’re thinking of buying or selling a house, you’re at an exciting decision point. And anytime you make a big decision like that, one thing you should always consider is timing. So, what does the rest of the year hold for the housing market? Here’s what experts have to say. The Number of Homes Available for Sale Is Likely To Grow There are early signs housing inventory is starting to grow and experts say that should continue in the months ahead. According to Danielle Hale, Chief Economist at realtor.com: “The gap between this year’s homes for sale and last year’s is one-fifth the size that it was at the beginning of the year. The catch up is likely to continue, . . . This growth will mean more options for shoppers than they’ve had in a while, even though inventory continues to lag pre-pandemic normal.” As a buyer, having more options is welcome news. Just remember, housing supply is still low, so be ready to act fast and put in your best offer up front. As a seller, your house may soon face more competition when other sellers list their homes. But the good news is, if you’re also buying your next home, having more options to choose from should make that move-up process easier. Mortgage Rates Will Likely Continue To Respond to Inflationary Pressures Experts also agree inflation should continue to drive up mortgage rates, albeit more moderately. Odeta Kushi, Deputy Chief Economist at First American, says: “… ongoing inflationary pressure remains likely to push mortgage rates even higher in the months to come.”   As a buyer, work with trusted real estate professionals, including your lender, so you can learn how rising mortgage rate environments impact your purchasing power. It may make sense to buy now before it costs more to do so, if you’re ready. As a seller, rising mortgage rates are motivating some homeowners to make a move up sooner rather than later. If you’re planning to buy your next home, talk to a trusted real estate advisor to decide how to time your move. Home Prices Are Projected To Continue To Climb Home prices are forecast to keep appreciating because there are still fewer homes for sale than there are buyers in the market. That said, experts agree the pace of that appreciation should moderate – but home prices won’t fall. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains: “Prices throughout the country have surged for the better part of two years, including in the first quarter of 2022. . . Given the extremely low inventory, we're unlikely to see price declines, but appreciation should slow in the coming months.”  As a buyer, continued home price appreciation means it’ll cost you more to buy the longer you wait. But it also gives you peace of mind that, once you do buy a home, it will likely grow in value. That makes it historically a good investment and a strong hedge against inflation. As a seller, price appreciation is great news for the value of your home. Again, lean on a professional to strike the right balance of the best conditions possible for both selling your house and buying your next one. Bottom Line Whether you’re a home buyer or seller, you need to know what’s happening in the housing market, so you can make the most informed decision possible. Let’s connect to discuss your goals and what lies ahead, so you can pick your best time to make a move.

Will Home Prices Fall This Year? Here’s What Experts Say. Many people are wondering: will home prices fall this year? Whether you’re a potential homebuyer, seller, or both, the answer to this question matters for you. Let’s break down what’s happening with home prices, where experts say they’re headed, and how this impacts your homeownership goals. What’s Happening with Home Prices?  Home prices have seen 121 consecutive months of year-over-year increases. CoreLogic says: “Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%.” So why are prices climbing so much? It’s because there are more buyers than there are homes for sale. This imbalance is expected to maintain that upward pressure on home prices because homes for sale are a hot commodity in today’s low-inventory housing market. Where Do Experts Say Prices Will Go from Here? Experts say the housing market isn’t set up for a price decline due to that ongoing imbalance between supply and demand. In the latest home price forecasts for 2022, they’re calling for ongoing appreciation throughout the year (see graph below): While the experts are forecasting more moderate price appreciation, the 2022 projections show price gains will remain strong throughout this year. First American explains it like this: “While house price growth is expected to moderate from the rapid pace of 2021, strong home buyer demand against a backdrop of historically tight inventory of homes for sale will likely keep appreciation positive in the coming year.” What Does That Mean for You? The biggest takeaway is that none of the experts are projecting depreciation. If you’re a homeowner thinking about selling, the higher price appreciation over the last two years has been great for your home’s value, but it’s also something you should factor in when planning your next steps. If you’ll also be buying a home after selling your current house, you shouldn’t wait for prices to fall. Waiting will only cost you more in the long run because climbing mortgage rates and rising home prices will have an impact on your next home purchase. Freddie Mac says: “If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices – well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.” Bottom Line If you’re thinking of selling to move up, you shouldn’t wait for prices to fall. Experts say prices will continue to appreciate this year. That means, if you’re ready, buying your next home before prices climb further may make the most financial sense. Let’s connect to begin the process of selling your current home and looking for your next one before prices rise higher.

It’s economy 101 – when supply is low and demand is high, prices naturally rise. That’s what’s happening in today’s housing market. Home prices are appreciating at near-historic rates, and that’s creating some challenges when it comes to home appraisals. In recent months, it’s become increasingly common for an appraisal to come in below the contract price on the house. Shawn Telford, Chief Appraiser for CoreLogic, explains it like this: “Recently, we observed buyers paying prices above listing price and higher than the market data available to appraisers can support. This difference is known as ‘the appraisal gap . . . .’” Why does an appraisal gap happen? Basically, with the heightened buyer demand, purchasers are often willing to pay over asking to secure the home of their dreams. If you’ve ever toured a house you’ve fallen in love with, you understand. Once you start to picture yourself and your furniture in the rooms, you want to do everything you can to land the property, including putting in a high offer to try to beat out other would-be buyers. When the appraiser comes in, they look at things a bit more objectively. Their job is to assess the inherent value of the home, so they’re going to study the facts. Dustin Harris, Appraiser Coach, drives this point home: “It’s important for everyone to understand that the appraiser’s job in the end is to remain that unbiased third party, to truly tell the client what that home is worth in the current market, regardless of what decisions have been made on the price side of things.” In simple terms, while homebuyers may be willing to pay more, appraisers are there to assess the market value of the home. Their goal is to make sure the lender isn’t loaning more money than the home is worth. It’s objective, rather than emotional. In a highly competitive market like today’s, having a discrepancy between the two numbers isn’t unusual. Here’s a look at the increasing rate of appraisal gaps, according to data from  CoreLogic (see graph below): What does this mean for you? Ultimately, knowledge is power. The best thing you can do is understand appraisal gaps may impact your transaction if you’re buying or selling. If you do encounter an appraisal below your contract price, know that in today’s sellers’ market, the most common approach is for the seller to ask the buyer to make up the difference in price. Buyers, be prepared to bring extra money to the table if you really want the home. Above all else, lean on your real estate agent. Whether you’re a buyer or seller, your trusted advisor is your ally if you come up against an appraisal gap. We’ll help you understand your options and handle any additional negotiations that need to happen. Bottom Line In today’s real estate market, it’s important to stay informed on the latest trends. Let’s connect so you have an ally to help you navigate an appraisal gap to get the best possible outcome. « The Difference in Net Worth Between Homeowners and Renters Is Widening       The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.