The housing market has been particularly active in recent years, with prices rising along with the growing interest in real estate. It has left the market in two camps: Sellers are ready to go and some buyers still sitting firmly on the fence, uncertain about which direction to take.
For real estate agents, the decision should be an easy one: Become a listing agent and grab the opportunities before you.
According to a Wolf Street report, one number that supports this move is the Fannie Mae Home Purchase Sentiment Index (HPSI), which increased in February 5.6 points year-over-year to 88.3, the highest ever in the data series going back to 2011. Some choppy waters have emerged since then. The index in May stood at 86.2, down 2.1 points from its February peak, but still up 0.9 points year-over-year.
Doug Duncan, senior vice president and chief economist at Fannie Mae, offers a look behind the curtain, a glimpse that confirms what every agent needs to know to navigate the turbulent waters of today’s market.
“High home prices have led many consumers to give us the first clear indication we’ve seen in the National Housing Survey’s seven-year history that they think it’s now a seller’s market.”
Learning to be a listing agent can ensure that your business will thrive and help you capture opportunities form both camps. Be prepared to allay the concerns of potential sellers. Duncan notes that some sellers still have concerns.
“Many potential sellers are unwilling or unable to put their homes on the market, perhaps due in part to concerns over finding an affordable replacement home.”
This leaves many sellers in a conundrum. They would like to reap the rewards of high prices, but may miss out because they can’t afford the high price and resulting payments of a new home. According to the Fannie May survey, Americans who say it is a bad time to buy surged 6 points from April to 33 percent, the highest ever in the data series. However, Americans who say it is a good time to sell increased by 4 points to 61 percent, also a new record in the survey.
The picture is clear: Americans are in a quandary, with 48 percent thinking home prices will rise over the next 12 months and only 8 percent thinking they will fall. On the other side of the coin, 56 percent say they believe that mortgage rates will rise.
For real estate agents, the data shows that potential clients may be souring on buying a home at these prices, and they are increasingly interested in selling. Once the solution to their problems of finding an affordable replacement is solved, the dominoes will fall.