A few months ago, I was in front of my house playing with the kids. A car pulled up, and a stranger lowered her window.
“Do you live here?”
I was a bit taken aback. I gave her a “yeaaah” answer. Like yes, I live here, and why are you asking me?
“I’m a real estate broker,” she said. “And I have buyers looking to move into the area. We’re not finding anything, and I was wondering if maybe you knew somebody who wanted to sell their house.”
I let my guard down and told her sorry, I didn’t.
This story played out all across the nation during the pandemic. There simply weren’t enough homes to accommodate all of the families who wanted to get into one.
The supply-demand imbalance was so lopsided that home prices increased to all-time highs all across the country.
Now that we’re mostly on the other side of the pandemic, we’re seeing early signs that supply is trying to catch up with demand. This map from Zillow was barren a few months ago. Now more red dots are popping up every day.
My neighborhood is not representative of the entire country, but new listings across the nation are coming to market at the highest rate since the pandemic started.
Buyers went crazy in 2020 with the prices they were paying, and sellers are going crazy in 2021 with the prices they’re asking. I tweeted yesterday that I’m seeing more and more price cuts in my town. More than a dozen homes in my community have lowered their asking price in the last couple of weeks.
I don’t know where home prices go from here, but I think they remain elevated if I had to guess. There are just more people that want houses than there are houses available.
It’s reasonable to expect home prices to cool off without expecting them to crash.