The spring real estate market is typically a busy time for home sales, but this year has been different. Despite the warmer weather and longer days, the market has remained sluggish, with minimal change in home sales from April to May.
According to the National Association of Realtors (NAR), existing-home sales decreased by 0.9% in May compared to April. This marks the fourth consecutive month of decline in home sales. Additionally, the inventory of homes for sale remains low, with only 1.23 million homes on the market in May, down 20.6% from a year ago.
One factor contributing to the slow market is the ongoing COVID-19 pandemic. Many potential buyers are hesitant to enter the market due to economic uncertainty and health concerns. Additionally, some sellers may be holding off on listing their homes until the pandemic subsides and the market stabilizes.
Another factor is the rising cost of homes. The median existing-home price in May was $350,300, up 23.6% from a year ago. This increase in prices may be deterring some buyers from entering the market, as they may not be able to afford the higher costs.
Despite these challenges, there are still opportunities for both buyers and sellers in the current market. For buyers, low mortgage rates are still available, making it a good time to lock in a low rate for a new home purchase. For sellers, the low inventory of homes for sale means less competition and potentially higher prices for their properties.
Real estate professionals are also adapting to the current market conditions by utilizing virtual tours and other technology to showcase homes to potential buyers. This allows buyers to view properties from the comfort and safety of their own homes, which may help alleviate some of their concerns about entering the market during the pandemic.
Overall, while the spring real estate market may be sluggish this year, there are still opportunities for both buyers and sellers. As the pandemic continues to evolve and the market adjusts, it will be important for all parties involved to remain flexible and adaptable in order to achieve their real estate goals.
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- Source: Plato Data Intelligence.