Spring Fever: Cooling Real Estate Markets Show Signs of Heating Up
A new report from Zillow predicts that the upcoming spring home buying season will be less chaotic than last year, but competition among homebuyers will increase. With the low inventory of homes on the market and buyers seeking value for their money, there will be heightened competition for well-priced homes during the busiest season of the year. Although affordability will still be a challenge for many buyers this year, the slight drop in mortgage costs since October should revive demand after last fall’s slump, especially in more affordable markets and neighborhoods. However, competition is unlikely to reach the fever pitch seen in the last two years.
Despite the lack of ultra-low mortgage rates that fed the housing frenzy in 2021, the report suggests that low inventory combined with gradually decreasing mortgage rates will likely lead to increased competition. The report predicts that well-priced homes will sell without difficulty during the spring, but many homes may require a price cut to sell. Zillow reports that during January, 22 percent of homes on the market took a price cut, the highest amount since 2018.
Housing agents, like Alees Poulakis from Coldwell Banker Realty in northern New Jersey, have noticed a rise in demand ahead of the official start of spring. She recently saw a crowded open house for a $469,000 home with a line of 20 people out the door, which she hadn't seen in months. Due to the shortage of affordable homes in her market, she expects to see such demand more often in the coming months. Terry Hendricks, an agent with RE/MAX DFW Associates in the Dallas-Fort Worth area, has also seen activity pick up in the market.
Last week, two of his clients wanted to make offers on four properties in the Dallas suburbs but all four houses ended up receiving multiple offers — something he hasn’t seen in months. “My clients were flabbergasted,” he said. “Several months ago these were the same homes that were potentially on the market for two or three months.” Hendricks has witnessed more activity while representing sellers as well. One of his listings that has been on the market since November, received multiple offers over the past six weeks after going untouched for two months.
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