What are real estate brokers expecting this spring?

A panel of brokers from across the country shared their views on market changes and their expectations. On the one hand, this spring season will not be usual.

MADISON, NJ – A recent roundtable with several Better Homes and Gardens Real Estate (BHGRE) brokers across the country revealed that historical seasonality trends have been affected by today’s market conditions – specifically, record inventory levels.

“As we enter the third spring selling season since the emergence of COVID-19, the BHGRE brand wanted to explore what our affiliates were experiencing in different parts of the country,” said Sherry Chris, President and Chief management of BHGRE. “The panel of brokers observed that strict seasonality is seeing signs of change. However, it is important to understand all of the underlying factors contributing to this significant shift in real estate market dynamics. What is clear is that a lack of inventory resulting from stalled new development is setting the industry up for continued disruption. Identifying and overcoming barriers to building new homes will be key to meeting the incredible demand for housing that currently exists in our country.

Temporal trends

The timing of the spring sales season varies by region. In northern New England, the spring selling season typically kicks off in March, but with only 30 days of supply, there aren’t enough homes to create a seasonal “spike” in sales this year. People also seem to be waiting for January and February to see COVID-19 cases drop to reduce potential exposure.

In Portland, Oregon, the spring sales season typically begins early in the year, although the push for the omicron variant has stalled it this year. Brokers see some traces of seasonality, but it’s not full-fledged. People will move as soon as the opportunity arises, which means that for sellers, there is no longer a bad time to sell.

“With only a week of inventory, an increase in seasonal activity is not possible here in Portland,” broker Danielle Bade said. “The houses sell as soon as they come on the market. People don’t wait for a traditional season to enter the market.

Price fluctuations

According to brokers in northern New England, prices are still considered moderate compared to urban areas. In Lehigh Valley, Pennsylvania, located between New York and Philadelphia, home prices are lower than in major cities. In Northern California, prices are flattening somewhat but remain higher than expected due to low inventory levels. In Portland, prices are not expected to drop this year.

Despite double-digit price increases, the brokers surveyed are convinced that this is not a real estate bubble. Appreciation rates may moderate a bit, but prices will not fall. Panelists remain alert to consumer tolerance of rising prices and seller greed, which could cool the market.

“This is a totally different dynamic from 2008, which was driven by lax lending,” broker Chris Masiello said. “It’s a supply and demand issue that’s driven by demographics: millennials and baby boomers are circling the market for the same housing stock. These first time buyers and discount buyers are vying for the same properties. »

“It is possible that prices will plateau and then return to a more normal rate of appreciation,” broker Jack Gross added. “We could also see buyer frustration causing people to leave the market because they are tired of not having a home. But consumer confidence in the housing market is high, which puts them at risk of overpaying.

Changes in buyer mindsets

Brokers surveyed are seeing a growing sense of urgency from consumers to “win” the home, pushing prices beyond normal appreciation rates. That means they’re paying now for what a house might be worth two years from now. As a result, the wording changed from “I bought a house” to “I won the auction”.

Another change: People aren’t interested in homes that require significant labor equity. Instead, they are more focused on their careers.

Additionally, brokers have observed that living with COVID-19 has worn down the psyche. Depending on the region, consumers are either tired of the coronavirus and moving forward with plans, or still in a waiting pattern created by health anxiety.

“Although house prices have increased by about 30% in Central Floridathe market isn’t slowing down, although the lack of inventory is disheartening for buyers, especially first-time buyers who are dealing with rising rents,” said Dana Hall-Bradley, broker/landlord in Celebration, Florida.

Seller mindset

Participating brokers report that current inventory conditions are giving new meaning to the term “seller’s market.” In some cases, sellers become irrational about pricing, insisting on list prices well above current market values. In other cases, sellers become more cautious with prices that are too high. However, homes still receive multiple offers over the list price when the price is right.

“For most sellers, the biggest deterrent is ‘Where am I going?'” says broker Chris Masiello.

“We’re hearing more and more from sellers that it’s not always the highest price – offers with contingencies are less desirable,” broker Danielle Bade said.

© 2022 Florida Realtors®

Kristan F. Talley