It appears the red-hot housing market is starting to cool off at last. That was one of the goals when the Federal Reserve raised interest rates. They wanted to get the market under control and increasing the cost to borrow money was deemed the best way to get a handle on the runaway housing market (among other economic factors, like inflation).

Housing Market “Then”

The past couple of years have seen unprecedented demand for housing and not nearly enough inventory to fill it. We were low on inventory and in a seller’s market before the COVID-19 pandemic. Buyer demand shot through the roof. Between workplace related shifts (layoffs, promotions, job changes, expanded work from home options) and historically low interest rates (in the 3 to 4% range), it’s no wonder everyone wanted to get a jump on their dream of homeownership. The result of this increase in demand? Property values experienced exponential increases and the massive competition among buyers led to a desperate struggle for buyers to win their new home.

Housing Market “Now”

Fast-forward to now. Housing inventory is still woefully low, but interest rates are higher than many first-time buyers and others in the current housing market remember them being in recent years (5 to 6%). The quick increase in rates sent buyers slamming on the breaks for their purchases which has now led to sellers dropping the prices on the homes they’re selling and listing for what are considered more reasonable prices. Depending on how motivated they are, sellers are also starting to offer incentives to buyers and/or their agents to get homes under contract quicker, the time on-market is getting longer.

What’s This Mean?

The housing market is not collapsing, but it’s correcting itself. Prices are coming down, though a collapse a la 2008 is not at all expected due to the “safer” lending practices that were put in place after that debacle. A healthy market is neither a seller’s market nor a buyer’s market. It’s a middle of the road environment where there is equal supply and demand for homes. Usually that would be about 4 months of inventory (meaning it would take about 4 months to sell out of the existing inventory; also called absorption). As of the writing of this article (7/11/22), the current supply of single-family homes in Pinellas County priced at or below $500k is about a 1 to 2 month’s supply. So we still have a very strong seller’s market. The average days on market for these same homes is about 33 now, whereas it was 13 days about a month ago (obvious signs of the market finally starting to normalize).

If You’re In the Market to Make a Move Today

People always need a place to live. And the market will always fluctuate over time. By buying or selling now, you’re still in a good position to sell fairly quickly and as a buyer, your property likely will still appreciate over the next 10 years. If you’re ready to dive in, let’s talk!

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Are you ready to start your home search? Then it’s time for us to talk! There are many ways I can help with the process and get you on your way to purchasing your next home. Scroll down to book your initial buyer’s consultation by phone or video call by clicking here or scroll down.

You can click here to check out the current market statistics as well. See average home prices, average time homes are on the market and how they compare year-over-year.

Not quite ready to start your home purchase journey, but want to get a look at what’s currently on the market? Click here to search current listings in the area.