For buyers’ agents wondering where all the listings are, or listing agents struggling to find clients, there is some potentially good news in the form of a Bright MLS survey released last week, with buyers returning to the market and current homeowners reaching a tipping point to list their homes.
“I think we may have hit bottom on the sort of pessimistic sentiment on supply,” says Bright Chief Economist Dr. Lisa Sturtevant, who conducted the survey. “Only time will tell.”
With more than 100,000 subscribers across five states, Bright’s footprint might not be a representative sample of the whole country, but can certainly provide some insight into the current—and future—state of the market.
One important takeaway is that sellers are less concerned about current mortgage rates, with 90% saying they were going to sell regardless of rates. Sturtevant says she expects homeowners, especially older ones, to eventually want to cash in on their equity, regardless of rates.
“That’s your early to late baby boomers, 59- to 72-year-old people who may have refinanced (in the last couple years). So they may be locked into a very low rate, but they have also accrued a lot more equity in their home,” Sturtevant describes.
That process could begin playing out earlier rather than later, Sturtevant says, as people realize that the value of their home isn’t going to shoot up another 15% in the next few months. While right now, homeowners are clearly still hesitating to sell, the number of people who have held back is creating a build-up, a backlog of likely listings that will flood onto the market at some point.
“We’re hearing from agents that people are thinking, ‘Maybe home prices are not going to fall, but maybe we’ve seen them rise as high as they’re going to be, so this would be the right time—if I have somewhere to go—to cash out.’ And I think that’s going to be a bigger factor in the next few months,” Sturtevant said.
Conversely, though, the survey showed that agents still expect depressed seller activity overall, with only 6.2% projecting “high to very high” seller participation in the next three months. Sturtevant says that is reasonable, and that there is no reason to think even a big influx of these cash-out sellers could fully tip the market toward balance.
One exception—coastal, affluent markets are actually seeing rising inventory from a year ago, as owners of vacation homes and remote workers unload properties in response to post-pandemic economic pressures. Overall, though, the average suburban or metro market is still falling compared to a year ago, Sturtevant says.
On the buy side, it has been hard to parse out exactly what is happening. An apparent surge of first-time buyers observed over the last few months is likely due to a decrease in repeat buyers, according to Sturtevant, rather than some new interest from first-timers.
“It’s not so much that first-time buyers are flocking to the market. It’s just that they’re a bigger share because the folks who have to sell a home first are a smaller share of the market,” she explains.
But the demand hasn’t waned. Just about seven-in-10 (68.8%) buyers are making multiple offers, with the average number of offers made by a buyer standing at 3.4. More than a quarter of buyers (26.3%) remained persistent, searching for six months or more, and about a third said it was somewhat difficult or very difficult to find the right home.
“It’s not some super surprising finding,” says Sturtevant. “But the extent to which this sort of searching process is really still an obstacle means that there are some people who are wanting to buy and are just simply having the hard time finding something that they either really want or are willing to compromise on.”
Potentially, this persistent demand will meet that influx of pent-up inventory starting in the fall, Sturtevant guesses. This fall and winter will “probably not” see the traditional pattern of seasonality, she says, and if there is any movement on mortgage rates, real estate activity could significantly warm up as the weather grows colder.
“We may see what I think will be more of an opportunistic market,” she says. “I think it’s possible we could see a surprisingly unseasonable increase in inventory as we head into the winter, though we’re still going to be very inventory constrained for sure.”