Across the Mid-Atlantic markets sellers are holding their driver seat positions in home sales,according to a new report from Bright MLS.
Bright MLS’s monthly market report for May found that Sellers who closed on their home in April received an average of 3.5 offers, and 53.5% ended up closing at a price above their original asking price. Sellers receiving over list price accepted an offer that was, on average, 5.5% higher than the price they had originally listed.
The report also found that while inventory remains low, family changes prompt sellers to list. Nearly one out of five sellers said that they had listed their home for sale as a result of family reasons, including marriage, divorce, having a child, or to be closer to family. Estate sales or sales of a home with an owner who passed away accounted for another 11.1% of transactions in April.
In addition, the report found that real estate agents are less optimistic about the summer housing market than they were a month ago. The outlook on the market three months from now was less upbeat from survey respondents.
- The most competition was among three- and four-bedroom homes in the $300,000 to $499,999 price range. Inventory remains limited in this price range, and demand for these types of homes from both first-time buyers and move-up buyers is high.
- Homes that sold above list price were under contract much more quickly than those that came in below original asking price, at five days vs. 15 days, respectively.
- According to agents working with buyers who closed in April, 46.1% of Mid-Atlantic buyers were first-time homebuyers. This is about the same share as a month ago and remains significantly higher than the national share reported by the National Association of REALTORS®.
- Nearly 60% of first-time buyers purchased a home with three bedrooms, and four out of 10 bought a home for less than $300,000. First-time homebuyers are also more likely than repeat buyers to buy with FHA, VA, or USDA loans and are much less likely to make all-cash offers.
- As a result of limited inventory in their price range and competition with all-cash or conventional loan offers, first-time buyers are facing more competition in the market: 53.3% of first-time buyers paid over asking price, compared to 49.3% of repeat buyers.
- Some listing activity does appear to be more discretionary, including sellers who said they sold their home primarily because they were looking to move to a bigger home (11.8%), or because they wanted to downsize (12.1%).
- Individuals selling a rental or investment property also remain a big part of the market, though the share of these types of sellers has decreased from 16.2% last month to 14.9%.
- Agents still feel very confident that buyer activity will be much stronger than seller activity. 47.2% of survey respondents indicated that buyer activity would be “high to very high” in the next three months. That share was above 50% in April.
- Only 6.9% of respondents said that seller activity would be “high to very high” in the next three months, while 54.3% said that seller activity would be “low to very low.” This is higher compared to April, when 50.7% of respondents were forecasting “low to very low” seller activity.
“The spring market is well under way, but it is far from typical. Sales activity remains below pre-pandemic levels, although buyers are still finding a lot of competition, as home shoppers compete for a still-limited number of homes for sale,” said the author of the report. “Inventory is shrinking in some markets, and new listings are still way below historic trends.”
Bright MLS Chief Economist Lisa Sturtevant added that “The survey results highlight how low inventory is making the market feel very competitive to buyers. Making offers on multiple homes and offering above list price are both common as prospective homebuyers vie for a limited number of homes on the market.”
For the full report, click here.