Existing-Home Sales Drop 4%, but Buyers Face Tough Competition

Existing-home sales dropped 4% last month, according to the National Association of REALTORS® (NAR), but buyers are still facing tough competition in the market. The housing market continues to favor sellers, with a limited number of homes available on the market and rising home prices. Additionally, buyers are contending with the highest mortgage rates in 20 years. In October, existing-home sales for single-family homes, townhomes, condos, and co-ops fell 4.1%, marking a nearly 15% decline compared to the same period last year. While this decline may suggest a slowdown in the market, buyers are finding it challenging to secure a home due to the intense competition they face. One of the main issues buyers are encountering is the lack of housing inventory. The persistent shortage of available homes is putting pressure on buyers, as they have to compete against one another for the limited number of properties on the market. This is particularly evident in the starter and mid-priced home segments, where multiple offers are still common. Even in the upper end of the market, sellers are making price concessions to attract buyers. The scarcity of homes for sale is driving up prices. As demand continues to outpace supply, sellers are able to command higher prices for their properties. This trend is further exacerbated by the fact that mortgage rates are at their highest level in two decades. The combination of rising prices and higher interest rates is making it more difficult for buyers to afford a home. NAR's Chief Economist, Lawrence Yun, acknowledges the challenges faced by prospective home buyers. He states, "Prospective home buyers experienced another difficult month due to the persistent lack of housing inventory and the highest mortgage rates in a generation." Yun also highlights that multiple offers are still occurring, especially in the starter and mid-priced home segments, indicating the strong competition buyers are up against. The current market conditions are not only impacting individual buyers but also the overall housing market. The decline in existing-home sales can have a ripple effect on the economy, as real estate transactions contribute significantly to economic growth. A slowdown in home sales can lead to reduced consumer spending and lower job creation in related industries. To address the challenges faced by buyers, it is crucial to increase the housing inventory. Local governments and builders need to work together to incentivize the construction of new homes. This can be done through streamlined permit processes, tax incentives, and other measures that encourage builders to invest in new housing projects. Additionally, efforts should be made to convert vacant properties into livable homes, further expanding the available inventory. Buyers can also benefit from working with experienced real estate agents who have a deep understanding of the local market. These agents can provide valuable insights and help buyers navigate the competitive landscape. They can advise on pricing strategies, negotiation techniques, and alternative financing options that can make homeownership more attainable. In conclusion, while existing-home sales may have dropped 4% last month, buyers are still facing tough competition in the real estate market. The limited housing inventory, rising home prices, and high mortgage rates are making it challenging for buyers to secure a home. To alleviate these issues, efforts should be made to increase the housing inventory, and buyers should seek the assistance of experienced real estate agents to navigate the competitive landscape. By addressing these challenges, the real estate market can become more balanced, benefiting both buyers and sellers.

Presented by:
Tina Yakel, Broker Associate
Keller Williams Gainesville Realty Partners
www.tyhomes.com
[email protected]
352-213-1084