With the housing market in a state of uncertainty, why is no one listing their home for sale right now? The lack of inventory and uncertain market conditions are prompting would-be sellers to wait it out. At the same time, home shoppers are in their droves. According to a recent Zillow survey, only 1% of homeowners are currently selling. Considering the slew of buyers seeking to buy a home, this lack of inventory is a major concern for would-be sellers.
Demand for Housing Has Skyrocketed
The housing market is overpriced. Many homes have not sold for over a year, which has lowered the inventory. The demand for homes is also a result of historically low interest rates. Despite the overpriced housing market, there is still a good deal of bargain-hunting available to those who are prepared to make the jump. There are several reasons why no one is listing their home for sale right now.
The shortage of available homes in many parts of the country has fueled the increase in home prices. Many builders were ill-prepared for the surge in housing demand last summer. Some had already laid off workers or shut down operations due to the pandemic and did not expect a recovery this quickly. Skilled labor is scarce, and there are not enough buildable lots.
Supply Has Shrunk to Historic Lows
In the past few years, supply of homes for sale has decreased to an all-time low. After a surge in demand fueled by low mortgage rates and a wave of millennials looking to buy a home, inventory levels plummeted. The inventory of homes for sale fell to a 15-year low in September of last year. It had not fallen below five months in the two years prior to April 2020.
The number of homes for sale in the Philadelphia metro area fell below one month’s supply in December. The region’s supply is six months lower than it was ten years ago, according to data from multiple listing services. The reduction in inventory is attributed to factors such as fewer new homes being built, restrictive local zoning, and the fact that millennials are entering prime home-buying years. The number of investors holding lucrative rental properties is another factor in the shortage.
Winter is A Slow Time of Year for Home Sales
While it’s true that winter months are slower, homes are selling at a higher rate than in any other season. This is likely due to low inventory. Many buyers are eager to move in and don’t want to spend their weekends waiting for showings to begin. Additionally, buyers will be more serious about buying a home during this time of year, so the seller can expect fewer concessions from buyers.
The winter is one of the cheapest times to purchase a home. Sellers will also be motivated to sell their home, making the process more efficient for the buyer. This time of year is also when most people suspend their home listing, so those who choose to list during this time will often offer extra perks to attract buyers. Likewise, real estate agents will be more flexible when it comes to commissions and closing costs during this time of year.
Realtors are Working their Networks
With the real estate market booming, it’s no surprise that some realtors are flouting the normal rules to find out about properties that haven’t even been listed. One South Florida agent, Liz Hogan, said agents with buyers are working their networks to find properties before they go on the market. The agent who found the home will knock on doors until he finds the perfect match.
Often called pocket listing, these properties are not listed on the MLS, and are available only to real estate agents who know about them. This advantage gives buyers an edge in a lopsided housing market. While pocket listing can be lucrative for Flat Fee Realtors, housing advocates fear that the practice will only increase inequality in homeownership by shutting out potential buyers. Pocket listing may also have a negative impact on the housing market, with home prices already at historic highs.
A seller’s market is great for homeowners, but this unprecedented situation can create a “catch-22” for sellers. As a result, many homeowners have become home buyers. The results of a recent survey indicate that both home buyers and sellers would want to sell their current home at a high price. Home buyers would be less likely to hesitate to offer higher prices to get into a house because of the price spike, but they would also be more difficult to find a new home in the current market.