Today’s housing market is brimming with potential, as evidenced by the glorious return of equity and consumer confidence.
However, for real estate to truly cross the recovery threshold into what you might consider to be a period of sustained prosperity, it will need to overcome at least one more significant hurdle: barren inventory reserves.
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When inventory is low
For what it’s worth, people want to buy houses, and they are more prepared to do so than they have been in the past five years; they just aren’t awarded the opportunity. Inventory levels, or lack thereof, have prevented the entire industry from moving forward.
Fortunately, it appears as if the tide is turning. Not only is hope on the horizon, but it might also already be here.
It’s important to note that we might be on the verge of drastically improving our inventory reserves sooner rather than later, which spells great news for everyone in the industry.
If for nothing else, seller sentiment has reached a point where the addition of new homes to the market is almost inevitable. Selling a home in today’s market has simply become synonymous with too many benefits not to at least consider it.
Those that were on the fence might finally have the incentive to sell they have been waiting for. Instead of holding on to their homes, like so many have been doing recently, it is likely that we will see more owners place their properties up for sale.
Good time to sell?
According to a recent Redfin survey, “52 percent think now is a good time to sell in their neighborhood (up from 34 percent last year), and 58 percent think sellers have more power than buyers (up from 44 percent last year).”
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However, though those numbers are certainly encouraging for the nation’s current inventory crunch, they might be more indicative of a trend that has been in place for nearly six months.
Accordingly, those numbers represent the second consecutive quarter in which the majority was convinced that now is a great time to sell.
What’s more, and perhaps of even greater importance, is that seller confidence appears to have reached a historical high. Now is essentially a great time to sell, and homeowners are taking notice.
It shouldn’t surprise anyone to hear that sellers are more confident than ever before, given the nature of today’s market. No more than a few months ago, in June, the housing market was one of the fastest and most competitive we have seen to date. The recovery has given the real estate sector some room to stretch its legs.
It is important to note, however, that one critical indicator stands to benefit from the new-found confidence exhibited by today’s homeowners: inventory levels.
For what feels like far too long, inventory levels have impeded the progress of the housing sector. On a national level, Redfin notes, there are just 2.8 months of housing supply; that’s not even half of what many would consider to be a balanced market.
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I am very excited to see what the latest increase in seller sentiment means for the industry as a whole, which begs the question: What does all of this mean for real estate agents?
What’s it all mean?
For starters, more sellers translates into more buyers. Savvy agents who position themselves accordingly should be able to take advantage of the impending surge of transactions.
However, agents that can determine what perspective sellers might be looking for in their next house will have a distinct advantage. Although knowing that there might be an influx of home sales in the near future is great, knowing what those same sellers will want out of their next home could be a game-changer.
It might be easier to determine what these sellers are looking for than many agents think. Sellers want larger, nicer homes in higher-rated school districts — at least, that’s according to Redfin.
“Wanting a larger or nicer home topped the list of reasons people are looking to sell at 40 percent, up from 29 percent last year. Selling in order to move to a better school district increased to 15 percent, up from 7 percent last year,” said the real estate data company.
“Many move-up buyers have told me they are buying now to take advantage of low mortgage rates,” said Redfin Little Rock real estate agent William Porterfield. “Buyers are trying to get as much home as possible before rates rise.”
Armed with this knowledge, real estate agents might be able to position themselves in such a way that allows them to realize success on a whole new level.
That said, the latest seller sentiment survey results from Redfin are nothing but encouraging and should work in favor of those agents who are willing to put in the time and effort.
Than Merrill is the founder and CEO of FortuneBuilders and CT Homes. Connect with Than on LinkedIn or follow him on Twitter @ThanMerrill.
