Why There Are No Houses on the Market and What To Do About It
If the market had a theme song right now, it would be “Patience” by Guns N’ Roses…
“All we need is just a little patience.”
But, as Aristotle said, “Patience is bitter.”
Right now it’s normally the height of the Spring selling season, but it’s far from that since there are hardly any homes on the market.
Before the pandemic hit, the housing market had just gone through its slowest inventory time of the year—from Thanksgiving until mid-February — when it’s typical not to have many homes on the market anyway.
After the pandemic hit starting in mid-March, that low inventory not only continued, but got even lower.
In fact, according to a Clever Real Estate survey, 91 percent of owners in April paused, canceled, or adjusted their selling plans due to coronavirus.
That means almost every single seller who was planning to put their home on the market didn’t.
But there are signs of hope and we are seeing gradual movement — we are working had to find win-win situations to match potential buyers and sellers, and showing that you can restart your real estate plans in a safe and secure manner whether you’re a buyer or seller.
Since real estate is considered an essential business, this can be done despite local stay-at-home-orders as long as we adhere to CDC and social distancing guidelines.
Here’s a great overview of what’s been happening when it comes to inventory, what we all can do about it to make the situation better, and how you can find a way to move forward in the weeks and months ahead.
Life Plans Put On Hold
This prolonged time of low inventory can feel excruciating for buyers who have dreamed of owning a home for years.
They may have tirelessly saved for their down payment, worked on their credit, and are more ready than they’ve ever been to make their homeownership dreams a reality. But they only find week after week very few homes to see.
The low inventory is also impacting our seller clients. With no homes on the market, there is nowhere to go when they’ve waited years to move up to that larger home. And many are getting nervous about being in the right school district in time to send their kids to school this Fall.
We keep hearing from our clients how disappointed they are with not being able to move forward with their life plans because there are hardly any homes on the market.
This is compounded by the fact that everyone is home almost all the time now, shining an even brighter light on what it means to have just the right place to call home.
Hesitant Sellers In All Price Points
First and foremost, we want to you to know this is temporary. And, it doesn’t have anything to do with your criteria or being able to “fix” the problem by increasing your budget.
The lack of inventory is the same across all price points, and as we often say, money doesn’t always solve a criteria issue anyway.
There are many reasons sellers paused their plans to put their home on the market:
- Job uncertainty
- Not wanting people in their home during a pandemic
- Unease about the economic impact about the pandemic
- Feeling like it’s not a good time because of buyer demand
All very understandable reasons to push the pause button on a home sale.
Buyer Demand Remains Strong
Buyer demand seems to have remained high in the DMV area, despite some buyers halting their searches initially due to the same reasons as sellers.
Many buyers have come to the conclusion that it can be a good time to move forward to perhaps skip the bidding wars that are typical this time of year.
Plus, many potential buyers need to move for a vast array of life changes, from relocating, getting married, having babies, or they recently sold a home themselves.
What Can Buyers and Sellers Can Do Now
To better deal with the current demand and lack of supply, there are things that sellers and buyers can do to make the situation better for them.
For buyers — Be very clear about what you are looking for in a home. Having more clarity can help us look for off-market homes for you. Yes, homes that aren’t officially listed.
Understand that this isn’t your usual market. Your plans will still come to fruition; they just may be delayed by a few weeks or months, but not forever.
For sellers — Realize that this time of year is when buyers want to move, especially those who have kids and dealing with school districts. That need hasn’t ended for many families even with COVID-19 going on.
Being open to new strategies if you need to or want to sell your home in the coming weeks and months ahead. We can come up with a plan that matches the right buyers for your home, who aren’t casual buyers but determined buyers.
Understand that potential buyers reemerging may have changed their criteria as they have been in lockdown over the last few weeks, reflecting what they have gone through in their current space. We’ll speak to those features in our marketing of your home or stage accordingly – such as home offices, exercise space, play areas for children, and yard space.
Know that prices are going to remain strong amid COVID-19 and afterward since inventory is limited and there is a growing housing demand from buyers. That’s good news for sellers as this pressure keeps prices strong, at least for now.
Determining what is comfortable for you and your family when it comes to listing your home, and working closely with us to ensure a safe and secure environment. Your health and safety are our top priority, and we have shifted how we show homes using more technology.
How We’re Being Proactive
In addition to keeping our hawk-eyes on the inventory for homes that fit our clients’ criteria, we also have several off-market initiatives that we are using in an effort to be proactive about finding our clients homes, or matching potential sellers with buyers.
1.) Off-market forums and groups. We are posting our buyer needs and information about our upcoming listings, working with other top agents in the area who may have listings that are not on the market yet.
2.) Reaching out to our homeowner clients. We are working with clients who have expressed interest to sell and are prepping their homes for sale. Keeping their plans to sell moving forward, while adhering to social distancing, can help bring more homes to the market that match your criteria
3.) Request for properties. We are reaching out to everyone we know—agents, clients, friends, family — looking high and low for properties that match our clients’ criteria. There are potential sellers who aren’t interested in having many people coming through their homes. Perhaps with just one showing they could sell their home to one of our buyers, creating a win-win situation for both parties.
4.) Being proactive vs. waiting around. We have always taken a proactive stance when looking for homes for our clients. But now more than ever, we are being proactive, calling agents who specialize in certain areas or price points, calling past clients, posting on community boards looking for anyone who might have a home that fits our clients’ needs.
Inventory Ticking Up
It seems like many potential buyers and sellers are coming to the conclusion that social distancing will continue for months and that has convinced them in deciding to move forward with their plans in a safe and secure manner.
And we are seeing this movement. Although new listings are down 39 percent year-over-year, they’ve been gradually rising for the past three weeks, according to a new study by Zillow.
In fact, the total number of new listings overall was up 5.9 percent last week from the week before.
Pent Up Supply and Demand
There’s good news for buyers who have been waiting on the sidelines. A recent study found that 77 percent of potential sellers are prepping their homes and getting ready to list.
This new study by the National Association of Realtors found that home sellers are gearing up to list their homes once stay-at-home orders are lifted or eased.
On the flip side, buyers have pent up demand too. In fact, a study by Johns Burns Real Estate Consulting found that new-home transactions have doubled in recent weeks as buyers in the 31 to 40 years old are interested in becoming homeowners.
According to the study, this group wants to get out of its dense apartment-style living situations and is comfortable using technology and virtual viewings to buy their first home.
And demand is growing from young families who have felt the constraints of living in tight space conditions during COVID-19. They are looking to move-up or upgrade to a larger home with more room and amenities to better fit their needs.
Staying Healthy Remains Our Top Priority
For buyers — know we are doing everything we can to look for off-market opportunities while we wait for the inventory to come back, which it eventually will.
For sellers — know that it’s a great time to sell and prices remain strong if you are comfortable moving forward with your plans now or later on.
Even though real estate and all related services have been deemed an essential business by both federal and local governments, we want to work within the comfort level of each one of our clients.
We will adhere to social distancing practices and our own safety policies and procedures with every client. See https://www.wheredoyoudwell.com/coronavirus-update-safety-first-with-your-real-estate-needs/
Our number one priority is to continue to help our clients meet their real estate needs while keeping everyone safe. See https://www.wheredoyoudwell.com/how-to-buy-and-sell-safely-during-coronavirus/
Never hesitate to reach out to us with concerns or questions about buying and selling no matter your timeframe.