Nanuet, NY- So is the party over? After two years of relentlessly surging sales and prices, has the seller’s market finally fizzled out? Should we start preparing for a buyer’s market, with falling sales, prices, and a shift of power to purchasers? The answer is “no, not quite yet.”
Last year was the strongest seller’s market in the history of the region, but we’re seeing clear
signs that the historically strong seller’s market that emerged after the pandemic lockdown in the middle of 2020 has cooled off.
“Cooling” does not mean “cold.” Even though the seller’s market might be fading out, it is important to note that this does not mean we are going to see an immediate shift to a buyers market. Several signs throughout the quarter have indicated that the market might be returning to a more normal, balanced state following an abnormally large two-year tidal wave of activity following the end of the lockdown restrictions, a surge in pandemic-driven urban-to-suburban migration, and the desire to lock in what were at the time historically-low interest rates.
Accordingly, we expect a softer transition to a more “normal and balanced” market rather than a severe correction to a buyer’s market. For one thing, we believe it’s a little misleading to compare this year’s market to the high-water mark of last year, which was the strongest seller’s market in the history of the region.
– Joe Rand, Chief Creative Officer at Howard Hanna | Rand Realty
What’s Going on in the Market?
For a better comparison, we reached back to the second quarter of 2019, which we’re calling a “control quarter” because it represents the kind of “normal and balanced” market we believe that we’re entering, before all the distortions of that post-lockdown tidal wave of activity. And if you compare the current market to 2019, you can see that it’s performing relatively well.
Another reason why we don’t think the market is going to enter a corrective buyer’s market anytime soon is that prices are still appreciating at a tremendous rate. That rate is slowing a little from 2020 and 2021, but it’s still well above traditional averages. Why? Because even with interest rates up, inventory is falling, so we still have too many buyers chasing too few houses. Basic economics: if demand is steady, and supply is falling, prices go up.
Five Takeaways from the the Second Quarter of 2022:
- Sales are down from last year’s all-time highs, but still relatively strong.
- Pending sales are also down significantly from last year’s torrid market.
- Prices continue to hit all-time highs, but will likely stabilize for the rest of the year.
- New listings continue to struggle, but inventory is stabilizing.
- Homes are still selling more quickly and for a better price than ever before.
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About Howard Hanna | Rand Realty: Howard Hanna Rand Realty has more than 1,100 residential real estate sales associates serving New York, New Jersey, and Connecticut suburbs of New York City. Its 31 offices serve Bergen County, Passaic County, Hudson County, Morris County, Essex County, and Union County in New Jersey, Westchester County, Rockland County, Orange County, Sullivan County, Dutchess County, Ulster County, and the Bronx in New York, and Fairfield County in Connecticut. Rand also owns and operates Rand Commercial, a commercial real estate brokerage, and Hudson United Home Services, which provides residential mortgage lending, title services, and personal and commercial insurance. For more information, visit https://randrealty.com.
About Howard Hanna Real Estate Services: Howard Hanna Real Estate Services is the largest privately held real estate broker in the United States. The full-service real estate company has nearly 500 real estate, mortgage, insurance, title, and escrow service offices across 13 states, including Allen Tate Realtors® in the Carolinas and F.C. Tucker Company in Indiana, with more than 14,000 sales associates and staff, including many of the industry’s top-producing real estate agents. For more information, visit www.HowardHanna.com.