Low inventory, high prices and ‘ruthless’ speeds make the market ripe for sellers
By Steve Yablonski
“It’s still a sellers’ market. Good for the sellers, but unfortunately not so much for the buyers,” said Faye Beckwith of Freedom Realty in Hannibal. “We work with both of them. It’s challenging because this is the first time we have had a sellers’ market as strong as this.”
Kim McPherson of Century 21 Galloway is in the 21st year of her real estate career. She has been busier than ever.
Is it still a sellers’ market? “Hell yeah!” she exclaimed. “The low inventory of homes for sale is still creating a sellers’ market throughout the entire country. The word that comes to mind when describing the last two years in our area alone is ‘ruthless!’ This market has been moving at mach speed. It has pretty much been the perfect storm with extremely low inventory all around and will still give the sellers the upper hand for 2022.”
“Two years ago, there were 2,249 houses available for sale in our multiple listing service area. Now, there is less than half that number. That is a winter market, comparatively speaking, from two years ago.”
Faye Beckwith, owner and operator of Freedom Realty.
“Real estate has been very good,” agreed Tom Hagerty, co-owner of Leah’s Signature Century 21 in Fulton. “It’s very robust. 2021 was a great year for us and real estate. We expect similar activities to continue in 2022.”
“It’s hard; we work with both the sellers and the buyers. We can’t predict. We have no crystal ball. But we’re certainly hoping that things will level out in regard to the balance, properties that are available and buyers that are looking. It’s tough now, especially for first-time buyers or anybody moving up,” Beckwith said.
“And of course, the prices are up rather significantly. That creates an additional challenge,” she added. “There are more people looking to buy right now and fewer properties for sale.”
“Right now, I am in the process of having my sellers get repairs taken care of, painting and tidying up their homes so they can capitalize on the market that we are headed towards,” McPherson said. “The chance for multiple offers (on each property) is still very likely.”
“All in all, I feel pricing is going to play a big role in the upcoming market,” McPherson added.
By the numbers
“As is evidenced by the first month that we have had, it’s great real estate activity so far in 2022,” Hagerty said. “We have seen some double-digit increases in prices as the supply went down and the demand went up. So there were some nice increases as far as pricing goes for home sellers.”
“Just comparing homes for sale about two years ago, there were 2,249 houses available for sale in our multiple listing service area,” Beckwith said. “Now, there is less than half that number. That is a winter market, comparatively speaking, from two years ago. I think that is a significant change.”
“Even looking at days on the market; a couple years ago the market was really heating up. Listings were averaging about 22 days on the market. That is a very low number,” Beckwith added. “Right now we’re looking at six days on the market. Some properties even have sold in just hours, others in just a few days. Of course, it takes a while for closings to take place.”
It is a good year for sellers.
“The fact that there is going to be a lower supply will, of course, likely lead to better results for sellers in a sense that the prices are going to appropriately reflect what the market will bear. Interest rates have gone up recently. It hadn’t earlier in 2022, but in recent weeks, there has been about a quarter-point rise in mortgage interest rates,” Hagerty said in late February. “We have also heard that the Fed is likely to increase the mortgage interest rate as the year progresses.”
“Now is the time certainly for buyers to buy because of what is likely to happen with the mortgage interest rate as well as prices increasing. And now is the time for sellers to sell while we are kind of at the top of the market here now,” he added.
“We’re hoping that things level out a little bit. It’s hard to know, they are predicting some increases in the interest rate, but it hasn’t happened yet,” Beckwith pointed out. “Traditionally, rates are up a little bit in the spring. That is a little reflective of the demand that increases in the spring market; when the weather breaks, it could be a February thaw, it could be March.”
“That’s a peak; so anybody that’s on the market at that time is going to get a lot of interest and usually quite a high price.” She explained. “As we go into the regular spring season then the number of new listings does increase and the prices stabilize a little bit then. But interest rates can also go up in the spring.”
“For my buyers, I make sure their financing is taken care of prior to looking as it has been required in order to even make an appointment. Having the pre-qualification ahead of time allows the buyer to be better positioned once they find a home they like,” McPherson said. “In addition to getting the buyer pre-qualified, I am discussing strategies on how to move forward with their highest, best and strongest offer possible. But, also at the same time preparing them for the likelihood of loosing out on the home, because we will still see the multiple offer situations.”
