It may not feel or look like spring in many areas yet, but as of Monday March 20th, it’s here! So does that mean the spring real estate market officially begins that day as well? Or does it kick off the weekend before or the weekend after since the first day of spring falls on a weekday? None of the above actually.
In fact, the spring market has already begun! Many people in the industry consider January to be the start of the spring real estate market. At least that’s when buyers who plan on buying in the spring often begin their search, and some even end up buying before spring arrives.
But there is truly a seasonal uptick when more sellers tend to list their houses, and more buyers are actively out looking in most areas. But when that officially begins depends on where you’re looking to buy or sell. If you’re in an area where winter weather is still packing a punch, like New England for instance, you probably have a few more weeks before it picks up. But in the south, you might already be seeing the activity. So if you’re looking to either buy or sell this spring, check with your local agent for advice on the best time for you to list or start looking.
Will This Spring Market Be Different Than the Past Few?
While the spring market is almost always a busier time of year in real estate, the past few years were more hectic than usual. Mortgage rates were at an all-time low, and there weren’t enough houses listed to satisfy the amount of buyers in the market for one.
So if you put your house on the market, it wasn’t uncommon to see a line of buyers and their agents waiting for a chance to see your house, and there was a good chance your house would sell within days and for over asking price. On the other hand, buyers had to be quick to see new listings and make an aggressive offer — and they still weren’t guaranteed their offer would be chosen.
Well, as you’re probably aware of, some things have changed in the real estate market since then… yet, other things haven’t. Here are the key factors that will affect both buyers and sellers this spring:
- Mortgage rates are higher. This is obviously the biggest change. We went from historically low interest, to rates that are more in line with where they tend to be historically. They’re not necessarily “high,” but they’re higher than they had been for some time, which affects how buyers feel, and how much they can actually afford to pay for a house.
- Houses are taking longer to sell in some areas and price ranges. It’s not like houses aren’t selling, but it may take more time to get offers and go under contract with a buyer. It depends a lot upon your price range and area, so you might find that you can get your house sold quickly and for over asking with multiple offers still, but in some areas your house may take some time to sell and you won’t get over asking price for it. Your local agent can give you insight into which is more likely to happen with your house.
- Inventory is still low. Again, this depends upon where you live and the price range you’re selling or buying in, but overall inventory hasn’t grown considerably. There are still too few houses for the number of buyers who want to buy one.
- Buyer demand is still pretty high. Despite rates having gone up, there are many buyers who are glad to finally be able to look for a house and not have to contend with as many other buyers as they would have over the past few years.
- Buyers are more cautious. Even though buyer demand is still high, and there aren’t that many houses to go around, buyers are being more deliberate and cautious. They won’t necessarily make offers as high as they had been, and they might not be willing to waive contingencies like a home inspection.
The spring real estate market has probably already begun (even as far back as January) to some degree in your local market, but it’s surely about to ramp up in the next few weeks with the official arrival of spring.
This spring market will probably not be quite like the past few since mortgage rates have risen, causing houses in some areas to take longer to sell. That said, inventory is still low, and buyer demand is still high.
So, if you’re planning to sell your house:
- Make sure it shows as nicely as possible.
- Price it appropriately against the competition.
- Make it easy for buyers to get in and see.
- Be flexible on your price and terms when negotiating. (Buyers may not be willing to pay the prices they were paying, or forgo contingencies as they were in the past few years).
If you’re looking to buy a house:
- Take advantage of less competition from other buyers than there was over the past couple of years.
- Don’t hesitate when you see a house you like; if you like it, someone else likely will too. Make a strong offer before anyone else does.
- Keep eye on rates and lock in your rate if it goes down a decent amount.