How to Navigate the Shifting Housing Market in Pennsylvania
It's undeniable that the real estate market has been hot over the last couple of years, with low inventory across the boards and high competition among buyers. However, the market now seems to be making a shift. After three years, the inventory of homes for sale has finally increased for the first time since June 2019, with newly listed homes up 6.3% nationally compared to a year ago.
While sellers are still listing at rates 6.4% lower than the pre-pandemic years from 2017 to 2019, the market is in the process of making major shifts. It's still a seller's market right now, but for how much longer? As a first-time homebuyer or even a seasoned homebuyer, it's important to keep up with the shifting market trends in order to secure a successful transaction. Read on to learn more about the shifting real estate market and discover how to better navigate these changes.
What Does the Shifting Market Look Like?
In May 2022, Realtor.com released some housing data that revealed some major turning points in the market. In terms of inventory, the data shows that the number of active home listings entering the market is higher than it's been since 2019. Nationally, the inventory of active home listings has increased by 8% over the past year, amounting to 38,000 more active home listings compared to May 2021.
While having more homes on the market is good for buyers, homes are still spending less time on the market compared to last year, and home prices are still rising. The market is definitely shifting, but not necessarily in a buyer's favor just yet. Interest rates are continuing to rise. These rising interest rates coupled with all-time high listing prices have increased the cost of financing 80% of the typical home by 48% compared to a year ago.
In addition to rising prices, newly listed homes are larger. In May 2022, the share of newly listed homes less than 1,750 square feet declined from around 47% to around 45%. In comparison, the share of newly listed homes more than 1,750 square feet increased from around 52% to around 54%. This may cause frustration for first-time homebuyers because while more homes are being listed on the market, many are larger and more expensive. For example, the national median listing price for active listings in May 2022 was $447,000. This is up 17.6% compared to May 2021 and up 35.4% compared to May 2020.
Tips for Navigating Market Shifts as a Buyer
In addition to partnering with a local, expert real estate agent, utilizing the following tips can help first-time homebuyers better navigate continued market shifts.
Know Your Budget
With rising mortgage rates and increased home prices, it's essential to do your homework and plan what you can truly afford in advance. In a seller's market, you should be prepared to pay the asking price. However, it is essential that you make buying decisions based on your finances and not on your emotions. Just because you can financially afford to pay over the market value of a home doesn't mean that you should or that it's in your best interest over the long term.
Get Preapproval From a Trusted Lender
Along with having a thorough understanding of your budget before buying a home, you should obtain a preapproved loan with a trusted lender. Getting a preapproved loan signals sellers that you are a serious buyer, and it may even gain you access to earlier showings ahead of other buyers.
Be Flexible and Patient
A final tip for first-time homebuyers navigating today's market shifts is to be flexible and patient. There will undoubtedly be ups and down on your homebuying journey, especially with today's market and continued market shifts. While there will be ups and downs, just remember that buying a home is still within reach, and when in doubt, always reach out to a local, expert real estate agent for help.
Tips for Navigating Market Shifts as a Seller
While the market is shifting, it's still an ideal time for sellers. The following tips will help you get the most out of your home selling experience.
Work With a Trusted Local Real Estate Agent
Even during a seller's market, it's important to work with a local expert real estate agent when listing your house. A local real estate agent will be able to give you the most up-to-date information on the market, navigate stressful contracts, and help you get the best price for your property.
Have a Pre-Inspection Before Putting Your Home on the Market
In addition to working closely with a local real estate agent, it would be to your benefit to have a pre-inspection completed on your home before you list it on the market. Having a pre-inspection can save you a ton of time, headaches, or delays down the road.
The market has favored sellers over the last couple of years. While shifts in the market are occurring, the market still resides in favor of sellers for now. However, the good news is that there are more active listings in the market today than last year. So, whether you're a seller or a buyer, the best way to navigate and stay on top of these market shifts is to work with a local real estate agent who you can trust.