Spring 2018 Home-Buying Season to Be Marked by Low Inventory

Home buying activity tends to pick up in the spring, as more and more buyers shake off the winter chills and prepare to enter the real estate market. This year, the spring home-buying “season” will be marked by low inventory across much of the country. And that will keep things competitive for home buyers seeking a property to purchase.

42: Number of Months Inventory Has Declined

Inventory has been the big housing headline for the last couple of years. And real estate markets nationwide continue to contract, as demand outweighs the supply of homes for sale.

According to Danielle Hale, chief economist for realtor.com, inventory within the nation’s housing market has been dropping steadily for years.

“This year [2018] there is even less inventory than last year,” she told Forbes recently. “According to our February 2018 data inventory is down 8.5% from last February.”

According to Hale, housing market inventory (the number of homes listed for sale) has declined for 42 consecutive months. That’s nearly a four-year trend!

Granted, these are national averages. Housing trends and conditions can vary widely from one city to the next. For instance, larger metro areas tend to have more demand for housing, and often less inventory, than smaller surrounding cities. And the big tech hubs — like Austin, Seattle, and Denver — are among the tightest real estate markets in the country as we enter spring 2018.

Tight inventory is affecting sales volume too. “We expect little growth in sales in 2018, given tight inventories,” said Gregory Daco, chief U.S. economist at Oxford Economics in New York.

There has been an uptick in new construction permits nationwide. But it will be a while before this has any measurable impact on housing markets across the country.

According to Aaron Terrazas, as the senior economist at Zillow:

“New construction has showed signs of perking up, but remains well below estimates of demand. More importantly, builders face rising labor, materials and land costs making it difficult to build at a price point attractive to entry-level buyers.”

What It Means for Buyers and Sellers

For home buyers, these trends highlight the importance of working with an experienced real estate agent when making a purchase. An agent can help you navigate the local real estate market and make a strong offer in a timely fashion. This is the key to success in a tight, competitive housing market. And those are the kinds of conditions we are seeing nationwide, as we enter the spring home-buying season.

Sellers can benefit from the high demand and relatively low supply we are seeing right now. Under these conditions, homes tend to sell faster and for a higher percentage of the initial list price. Multiple-offer situations are also more common when housing demand exceeds the available supply.

All in all, it should be an interesting spring for the real estate market.

The Benefits of Staging When Selling a Home

Seller’s market conditions persist in cities across the country, as inventory continues to fall short of demand. Under these kinds of conditions, sellers typically enjoy competing offers from buyers.

But that doesn’t mean sellers should skimp on the home staging. By staging your house for buyers, you can increase the chance of a quick sale and a full-price offer. And those are good things!

What Is Home Staging?

Home staging is when you take proactive steps to make your house more appealing to the majority of buyers. “Majority” is the key word here. Some people will dislike a certain property no matter what kind of staging is done. Taste is subjective, after all. But there are certain steps you can take to make your property appeal to the majority of potential buyers. And that’s precisely what home staging is all about.

The staging process can include such things as:

* Landscaping the yard, when applicable
* Painting the inside and/or outside of the house
* Replacing outdated fixtures with modern ones
* Arranging, adding, or removing furniture to maximize space
* De-cluttering the entire house
* Cleaning the house thoroughly from top to bottom

In some cases, these kinds of actions might be unnecessary or even cost-prohibitive. For example, a new or recently updated home with modern fixtures won’t require any new knobs, sink handles, or light fixtures. But an older home with outdated fixtures might need extra attention (unless the fixtures are antiques that add charm).

What’s the Point?

Now you know what home staging is, and what it involves. But what’s the point? What can you get out of it, as a home seller?

As a seller, your mission is to sell your house as quickly as possible, and for the best possible price. Staging can help you achieve these goals and in several ways. It creates aesthetic value, which helps to support your asking price. It presents your home in the best possible light, which will make buyers more inclined to make an offer.

Above all, effective home staging helps you set your house apart from others that are listed for sale in the area. This is especially important in a crowded market with many similar properties for sale.

When buyers look at a well-staged home, they tend to say things like:

  • “I got a great vibe from that house.”

  • “I didn’t want to leave.”

  • “I could see myself living there.”

  • “The owners have taken good care of that house.”

  • “It seems nicer than the other homes we’ve looked at.”

This is the kind of mindset that can lead to an offer.

Home staging allows you to create a favorable impression in the mind of potential buyers. And these kinds of impressions tend to “accumulate” as the buyer moves through the home. So if you stack enough of them in your favor, you’ll have a much better chance of landing a strong offer. And that’s your primary goal as a seller.