Tags Posts tagged with "seller’s market"

seller’s market

Pixabay photo

By Samantha Rutt

The real estate landscape in Suffolk County is experiencing a significant shift, with the scales tipping decidedly in favor of sellers. As demand continues to outpace supply, prospective homebuyers face fierce competition and rising prices. This phenomenon, commonly known as a seller’s market, has implications for both buyers and sellers in the region.

Suffolk County, nestled on Long Island’s eastern end, boasts a unique blend of scenic landscapes, vibrant communities, and proximity to New York City. This desirability has driven a surge in demand for residential properties across the county. However, this increased demand is not matched by a proportional rise in housing inventory, creating a supply-demand imbalance.

The limited availability of homes for sale has sparked intense competition among buyers vying for desirable properties. Multiple offers, bidding wars, and quick sales have become commonplace, placing sellers in the advantageous position of fielding competitive offers and securing favorable terms.

“​​There’s no inventory, that’s the bottom line,” Jolie Powell, of Jolie Powell Realty said. “We have a very strong buyer demand and we have virtually nothing to sell them.”

According to Redfin, a real estate brokerage corporation, the median sale price in Suffolk County in December of 2023 surged 9.4% compared to the previous year, hovering around $596,000. Homes spend an average of just 28 days on the market, compared to 36 last year, indicating a market hungry for listings. The sale-to-list price ratio often exceeding 100% showcases just how fiercely buyers compete for available properties.

“There’s several reasons,” the broker/owner Powell when asked about the potential causes for the lack of inventory said. “The rates have been high, people got spoiled. Post pandemic, the rates were 3%, and now the rates have doubled. People that locked into that rate have a good situation, and they’re not selling.”

With demand driving prices upward, Suffolk County has witnessed a steady appreciation in property values. Homes are fetching premium prices, often exceeding their listing prices as eager buyers seek to secure their slice of Suffolk County’s real estate market. 

“I don’t forsee the inventory level rising at all, which means the prices will probably appreciate, and we’ll probably go back to bidding wars again this spring,” Powell said. 

Sellers in Suffolk County are positioned to capitalize on the favorable market conditions. With high demand and low inventory, sellers can command top dollar for their properties and negotiate favorable terms. This upward trend in property values is a treat for sellers, who stand to benefit from lucrative returns on their investments.

Prospective homebuyers navigating Suffolk County’s seller’s market face formidable challenges. Buyers must act swiftly, be prepared to make compelling offers, and potentially adjust their expectations to align with market realities.

“I’m hoping the rates will come down a little bit, this spring, and all indications are pointing to lower interest rates than they are right now. So that will hopefully encourage people sell because those that sell need to buy as well,” Powell said.

As the county’s real estate market remains predominantly in favor of sellers, both buyers and sellers are pushed to adapt to the evolving landscape. With demand outstripping supply, buyers face challenges in securing properties, while sellers stand to benefit from rising property values and heightened competition. 

Graph from Michael Ardolino

By Michael Ardolino

Michael Ardolino

Many real estate experts will tell you when selling a house, no matter what the market is like, the seller can get a great return on their investment if they understand market trends. This particular piece of advice is always worth repeating.

Right now 

Many buyers were starting to acclimate to raising mortgage rates, which doubled within months in 2022. Lately, things have been improving. As of April 6, Freddie Mac reported an average 30-year fixed-rate mortgage of 6.28%, which was down from 6.32% the week before, making it the fourth seven-day period in a row where rates decreased.

A dip in mortgage rates leads to more buyers returning to the market.  

For countless potential homeowners, the obstacle will not be the mortgage rates; it will be the low inventory.

“Mortgage rates continue to trend down entering the traditional spring homebuying season,” said Sam Khater, Freddie Mac’s chief economist, in a press release. “Unfortunately, those in the market to buy are facing a number of challenges, not the least of which is the low inventory of homes for sale, especially for aspiring first-time homebuyers.”

Low inventory combined with higher rates than last year means prices are remaining steady across Long Island.

In a recent article on the Keeping Current Matters website, Lawrence Yun, chief economist at the National Association of Realtors, projected home prices will remain steady. “We simply don’t have enough inventory,” Yun said. “Will some markets see a price decline? Yes. [But] with the supply not being there, the repeat of a 30% price decline is highly, highly unlikely.”

In other words, most real estate experts are not predicting another housing crash.

Be a savvy seller

While home prices remain steady, buyers are not offering more than the asking price for houses that need work. How do you get your house to sell quickly? Make any necessary repairs. As I have mentioned in past columns, this doesn’t mean elaborate renovations. It means you must fix that leaky faucet, running toilet or damaged flooring.

Sellers also need to be flexible with showings. Keep your home clean and organized so that when an agent calls to say a buyer wants to look at your home, it can be viewed at a moment’s notice.

Most important of all, now more than ever, you want to work with a real estate agent who prices your home realistically. Look at what similar homes sold for in the past couple of weeks, not the last few years.

Take away

Sellers who are practical regarding pricing — looking at today’s prices and not yesterday’s — and choose to work with a real estate professional can garner a great return on their investment. 

So … let’s talk.

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA

Image from Michael Ardolino

By Michael Ardolino

Michael Ardolino

Real estate professionals are seeing more foot traffic at open houses, and here’s why.

Spring is in the air

The early part of the year can be slow for the housing market. As the weather warms up and the days are longer, more people search for their next home. Spring is a perfect time for potential buyers with children to look for a house before a new school year begins.

The trend means real estate agents are seeing more predictable seasonal patterns than in the last few years.

Inventory remains low  

One of the main reasons open houses have been busy is that the Suffolk County housing market is still experiencing a supply shortage. Low inventory is key in how the real estate market is favoring homeowners.

Buyers may not find what they are searching for when they attend open houses. Your home could be the exact one someone dreams of and would love to move into in the upcoming months — if the price is right.

As I have mentioned in past columns, to do well in today’s market, sellers need to ensure that their homes are priced correctly. An expert real estate professional studies national and local trends and is able to translate that information to help you make a decision based on trustworthy information. One that will have your house on the market at a price that is attractive in today’s market.

For homeowners who aren’t ready to sell just yet, now is the time to start prepping your home and sitting with an agent. Financial experts believe 2023 will be a positive turning point in the housing market, despite national news headlines threatening a crash.

Those experts include Nadia Evangelou, senior economist and director of research at the National Association of Realtors, who told the website Markets Insider, “We don’t expect any housing crash.” Backing that forecast is NAR’s pending home sales index sales showing slightly higher sales in the last two months.

Buyers are out there

While mortgage rates have been going up, savvy buyers know that they can renegotiate a better rate at a later time. Mortgage applications have increased by 7.4% as of March 3 from the week before, according to the Mortgage Bankers Association. 

Here’s another thing knowledgeable buyers know — the rates can be even higher. When looking at historical data on Freddie Mac’s website, people will find that every decade, starting with the 1970s, has experienced highs and lows regarding mortgage rates.

The increase has been due to the Federal Reserve’s taking an aggressive stance to curb inflation. While mortgage rates have deterred some potential buyers, it hasn’t hindered others.

“Higher mortgage rates will be a hurdle but ultimately will not keep  [buyers] from getting back into the market after sitting on the sidelines for months,” said Lisa Sturtevant, Chief Economist at Bright MLS.

Takeaway

In the long run, sellers and buyers can do well as long as they know to gather all the information they need. Whether it’s a buyer looking for the best mortgage rates and knowing they can renegotiate a better one in a few years, or a seller pricing their home at a competitive price, real estate professionals can provide valuable information to help make crucial decisions. 

So … let’s talk.

Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA