This article is part of our ongoing Thought Leader series. Originally published in the Knoxville News Sentinel, this article was written by Claudia Stallings, Coldwell Banker Wallace VP of Residential Sales. Knox News subscribers may also read the original version here.
I keep hearing the words “not enough inventory” and “housing shortage.” I keep seeing social media posts that show how many available homes for sale we DON’T have. But I’m here to offer you a different perspective.
The Wall Street Journal reported that last year, home sales in the U.S. reached a 15-year high. International Real Estate Speaker and Writer Matthew Ferrara says, “I got my degree in Philosophy not mathematics, but I know that you can’t possibly sell more of a thing and have a shortage at the same time.”
Let’s examine the most recent Knoxville-area numbers. Beginning in April of 2021 and continuing through the rest of the year, the number of homes entering the market began to exceed the number that were listed during the same time the previous year. In fact, we ended 2021 with a 5.4 percent INCREASE in the number of new listings over 2020.
From a sales perspective, there were 8.6 percent more homes sold in 2021 than in 2020. This means that both the number of new listings and the number of homes sold are both up. People who are selling are also finding homes to buy.
Ferrara goes on to say that words like “high velocity,” “moving quickly,” “high demand by consumers” are better words than “shortage” to describe what is happening in the market.
Ferarra continues, “If there’s a mismatch, if there’s more demand than availability, that’s not necessarily a negative thing. It works in sellers’ favor because it generates opportunity for them to have great appreciation and price power, and it works even in the buyers’ interest as well because it motivates them to take action into a marketplace that’s rising as an asset.”
What that means for buyers is that you need to be ready. To take advantage of this increase of new listings entering the market, buyers must act faster than ever before due to high demand. Know what it is you are looking for and have your financing in order. Talk to your Realtor about inspections and appraisals before you write an offer so that you have a strategy. Have them help you learn the market and understand what can be bought in your price range. Be ready to write a good, clean offer.
For sellers who also want to buy, don’t be afraid to put your house on the market for fear you won’t find anything. Talk to your Realtor about ways you can coordinate your sale with the purchase of your next home, and, be ready to act quickly in this “efficient” market on the buy-side.
“So, the bottom line is, the term ‘shortage’ is unnecessarily negative, unnecessarily pessimistic for something that’s not borne out by either the data or the psychology.”
“The market is doing just fine. Buyers are buying, sellers are selling more than ever before on both ends of the equation. Demand is high for a wonderful product where prices are rising. Everything about the dynamics of this market is fantastic,” Ferrarra concludes.
Source: matthewferrara.com #alwaysinspiring