What do you need to know about the autumn real estate market this year? Well, my unscientific research of home sales overall is that fall real estate this year will be nothing like the autumn real estate market last year.
Well, a few things.
One, even though there are still working and travel restrictions in place, fewer people are feeling trapped at home. Therefore, their desire to escape where they’d been living before is probably lessened. I mean, even The New York Times recently wrote an article about residents who escaped their apartments last year, for country homes, only to come back this year and buy new apartments so they can be back in Manhattan.
Two, home sales are slowly slowing. What do I mean? Let me explain.
Why I believe home sales will slow in the fall
I follow real estate home sales religiously. I do this in places where I own homes as well as places where I hope to one day own an investment property. Here’s what I’ve seen lately.
One, homes are staying on the market longer. For example, when I see a new house, condo or apartment show up in one of the many real estate apps I use, that home doesn’t go to a contingent or pending status within days. They might go within a week or two. However, at the height of the 2020 real estate market, homes were going in hours, if days.
Two, in some real estate markets, sold homes are showing up going for under asking. For instance, we used to live in the Philadelphia suburbs. There, everything was over-asking for months. Now, not so much.
Homes sell for more than their listing in a hot market
Three, in other hot real estate markets, homes are still selling for over asking, but not as much. So, one of the markets I watch the closest is Southern Maine. That’s where we bought a vacation home last year–a home that we’ll eventually retire to. But, for now, we’re renting to make extra money.
Last year, everything in Southern Maine was going into bidding wars. Then, homes were selling for 20 percent or more over asking. We were lucky that the house we bought we got for its asking price and we somehow avoided a bidding war. I’m not sure how we lucked out, but we did.
What sold listings are telling me about the autumn real estate market
Anyway, “sold” listings are showing up now. And I’m seeing a downward trend–which is great for buyers.
Many homes are still selling for more than they are listed for, but not by as much. On average I’m seeing homes selling for 10 percent higher than the listing price. Some are selling right at their selling price like ours did. That says to me the market is slowing down, even with tight inventory.
All of this is definitely good news if you want to buy a home this fall. The real estate market seems to be cooling off. Plus, mortgage interest rates are still at record lows. Put those things together, and buyers may have an easier time buying real estate this fall than they did last fall.
What buyers need to know about this year’s autumn real estate market
So, what do you have to keep in mind if you want to buy a home this fall? A few things.
One, if you’re buying in a place where home sales are still simmering, don’t expect many deals. If you want to buy a move-in-ready, turnkey home, you’re going to pay for it.
Two, if you’re looking to buy to get into a hot school district, consider renting until the market cools off even more. This may allow you to put away more money so you’ll have a bigger down payment to offer when you’re ready to buy.
Home sales will not slow down this fall
Three, even though fall is typically when the real estate market slows down–and often makes it the best time of the year to buy a house–that’s not likely to happen this year. If you’re wondering when housing prices will drop, it’s not likely to be this fall.
According to Realtor.com many people who considered selling during last year’s rush–and worried they might have missed their chance–are likely to list their home this fall. This will create more inventory for buyers who got beat out during bidding wars.
With demand still relatively high, I doubt you’re going to see housing prices fall. You might see them level off, but I doubt they’ll ever go as low as they were just 18 months ago.
What sellers need to know about this year’s autumn real estate market
If you’re one of the homeowners I mentioned above, thinking about listing your home, you should definitely do it while mortgage rates are low. However, because the crazy bidding wars of last year are likely over, you probably can’t just put out a for sale sign and expect offers to come rolling in.
First, you’ll probably need to prep your home for a sale like you would in years’ past during normal time. You may have to paint, take up old, smelly carpets and invest in your curb appeal.
Here are tips on improving curb appeal on the cheap: Cheap Ways to Improve Curb Appeal on a Budget
Price your home competitively
Second, if you want your home to sell quickly, price your home competitively but smartly. Comps from last year’s crazy bidding wars can help your house appraise for more, which is a great place to start with pricing.
However, don’t be a jerk and price your home super low, expecting to inspire a bidding war. Some homeowners in the Bay Area took this approach. According to the New York Times, people were getting offers for up to 100% over asking.
As a seller I understand the attraction of making the most money possible. But as a buyer, I would be super pissed if this was the market in which I was trying to buy a home.
Final thoughts on the autumn real estate market
Overall, I’m convinced that this fall’s home buying and home selling will be calmer than in the past. However, I believe that prices will continue to hold where they are.
So bargain hunters will probably strike out if they’re looking to buy a home on the cheap this autumn. On the other hand, sellers will likely continue to benefit from lower competition and low mortgage rates.