It has been a nutty few years for homebuyers across the country.
Record high prices, bidding wars, all-cash offers, waived inspections… what was once unheard of in real estate has become commonplace. Deals are few and far between just about everywhere as buyers snap up every property that’s even close to a good price, leaving millions of buyers out in the cold time after time.
And they’ve had enough.
After months and months of lost offers and more headaches, more and more buyers are stepping back from the process. And that might be the best thing for our real estate market right now.
By the numbers:
It’s not hard to see why this is happening. The median price for an existing (not new build) home in the U.S. rose to $350,300 in May, up 24% year-over-year and an all-time high.
According to the Fannie Mae Home Purchase Sentiment Index, the percentage of people who believed it was a good time to buy a home fell to an all-time low of 32% in June, even in the face of ultra low mortgage rates.
At the same time, a ServiceLink study found that 33% of people who had considered buying a home this year later decided against it. Of those, 31% cited the cost of buying as the main deterrent.
Quote: “Buyers are stepping away because they’re becoming frustrated with going to see a new property on the market and then finding out that it already has offers. Once you lose you have to be prepared to start the cycle all over again, which is a very unsustainable cycle.” — Bill Kowalczuk, a broker with Warburg Realty.
Why is Any of This Good News?
Existing home sales dropped by just 0.9% in May, but that marked the fourth month in a row during which home sales decreased. It’s not much, but it’s a sign that some of the pandemic-driven feeding frenzy of 2020 is wearing off and the market could soon have a chance at returning to normal.
That’s good news because it will make life a little easier for buyers again, luring more of them back to the market and infusing the next round of interest for the next round of sellers. A health real estate market is a sustainable market, and we haven’t been there in over a year. That may finally be changing.
