The Real Estate Market Shift: From a Seller's to a Buyer's Market

After months of bidding wars, cash offers, and over-ask purchases, the real estate market seems to be coming back to normal. While some sellers are still hanging on to that "sellers-market greed", list prices are starting to seem more reasonable. Some properties are even going for under-ask! Plus, houses are staying on the market longer, and nationwide inventory is up about 60% since January.

You might be wondering what even just happened? Why did all this "market craziness" even occur in the first place? And why is it cooling down now?

When it comes down to it, it was all was a simple case of supply and demand: lots of people moving here, and not enough houses for people to buy.

Due to many factors on a global level, we have seen an 8.6% inflation rate in the last year, which is the highest in US history since 1981. In efforts to curb inflation, interest rates have notably risen to almost 6%.

This has priced many buyers out of the market. What they thought would be a $2000 monthly mortgage is now all of a sudden $2400 monthly mortgage. Buyers are now forced to save up a little more money for a down payment, or lower their budget.

While this spike in rates will increase your monthly mortgage, there is a plus side! With less competition on the buyer side, the more serious buyers have more negotiating power. They won't be forced to compete with 10-15 other offers, and will have a better chance at purchasing the home they want (and in a more relaxed environment!).

Thus, with less buyers in the market, it seems like we are now shifting from a seller's market to a buyer's market.