January Buyers Challenged by Lack of Inventory



The residential market revved hot in January because of 2 factors: steady buyer demand came up against low inventory. The Business Journal summarizes the latest Housing Market Update from Redfin.

"Many sellers seem to be waiting until spring, so the inventory shortage is especially intense right now, leading to a renewed surge of bidding wars and buyers making offers that waive inspection and financing contingencies."

New listings fell 12%, the largest drop since June 2020, dragging the total number of homes for sale to another new low. 45% of homes this month found a buyer within two weeks of being on the market nationally. 35% of homes are going under contract within a week. This speedy sales cycle leaves the active listings down 29% from January 2021. (Watch the brief video below for benefits of selling or buying during the winter-spring transition.)





Offseason Intensity

Traditionally offseason times in the housing market, including winter months, are no longer truly slow. That's setting up the coming spring months, typically the kickoff of the prime selling season each year, to be the busiest ever as buyer demand remains high and inventory remains low. But mortgage rates, which have climbed in the past few weeks, could curb some activity.

“The early spring is poised to be the hottest housing market on record; we may start to see most homes going under contract within two weeks, but these conditions are likely to be short-lived,” said Daryl Fairweather, chief economist at Redfin, in a statement. “Now that the stock market is down about 10% from the start of the year and mortgage rates are up nearly half a point, the housing market could lose its luster soon. If that happens, I expect the inventory shortage to finally reach its nadir because overpriced homes will start to pile up on the market.”

Here is a link to the Housing Market Update from Redfin.

 



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