Over the past year or so, many critics and analysts alike have revealed their moments of skepticism on the market's ability to bounce back. The main reason being is low inventory, as sellers have become hesitant on putting their homes up for sale. It's completely understandable. After six years of countless inconsistencies and playing the waiting game, many sellers are not sure if they should just jump at an opportunity or hold out even longer. Although home prices have increased tremendously (compared to last year's numbers) and buyer demand is soaring, many sellers have continued waiting in hopes of getting the best deals possible. Even when indicators have pointed towards home prices being at a record-high (Sallie Mae notes that the average home price will rise 3.9% in the next 12 months, up from last month’s expected 12-month price hike of 2.7%).
Yet, according to a recent survey by mortgage insurer, Sallie Mae, sellers remorse may have just turned a corner. This survey reports that 40% of respondents believe that now is a good time to SELL, and 76% believe that now is a good time to BUY. As home prices are getting higher, so are the sellers level in confidence. In fact, the number of consumers who think is it's a good time to sell is at its highest in the survey's three-year history.
The stagnant inventory market over the past few months have left buyers jumping on new listings, driving home prices even higher (for the time being). Doug Duncan, senior vice president and chief economist at Fannie Mae, notes that a downturn in home prices may occur when housing inventories eventually reaches a bottom.
This jump may foreshadow a gradual return to more normal levels of housing supply from their lows of recent months. In turn, increased housing supply could serve to temper increasing consumer home price expectations.We will closely watch the potential impact of rising mortgage rates on consumer housing sentiment in the coming months.”
As inventory increases, prices will slow down. Analysts, however, are not sure when. This may be possibly be in the near future or many years from now. Note to Sellers: If the opportunity is right, take it.