Are We Heading into a Balanced Market? Insights from Beth Van Zee

If you’ve been keeping an eye on the housing market over the past couple of years, you know sellers have had the upper hand. But is that going to shift now that inventory is growing? Here’s a breakdown of what you need to know.

What Is a Balanced Market?

A balanced market is typically defined as one with about a five-to-seven-month supply of homes available for sale. In this scenario, neither buyers nor sellers have a clear advantage. Prices tend to stabilize, and there's a healthier selection of homes to choose from. After several years where sellers held most of the leverage, a more balanced market could be a welcome sight for anyone looking to buy or sell a home in Iowa. But are we really heading there?

Starting the year with a three-month supply of homes nationally, inventory has recently increased to four months. While this might not seem like a big jump, it does signal that the market is inching closer to balance, though it's not quite there yet. Importantly, this rise in inventory isn’t leading to an oversupply that would cause a market crash. Even with recent growth, there’s still not enough supply to trigger such a downturn.

The graph below uses data from the National Association of Realtors (NAR) to give you an idea of where inventory has been in the past, and where it’s at today:

For now, this is still seller’s market territory – it’s just not as frenzied of a seller’s market as it’s been over the past few years. As Mark Fleming, Chief Economist at First American, says:

“The faster housing supply increases, the more affordability improves and the strength of a seller’s market wanes.”

What This Means for You and Your Move

Here's how this shift impacts you and the market conditions you'll face when you move. Lawrence Yun, Chief Economist at NAR, explains:

“Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.”

The graphs below use the latest data from NAR and Realtor.com to help show examples of these changes:

• Homes Are Sitting on the Market Longer: With more homes available, properties aren’t selling as quickly. For buyers, this provides more time to find the right home. Sellers, on the other hand, need to price their homes competitively if they want to attract offers.

• Sellers Are Receiving Fewer Offers: As a seller, you may need to be more flexible and open to negotiating on price or terms to close a deal. Buyers could face less intense competition, with more options to choose from.

• Fewer Buyers Are Waiving Inspections: Buyers now have more negotiation power, which is why fewer are waiving inspections. Sellers should be ready to negotiate and address any repair requests to keep the sale moving forward.

How a Real Estate Agent Can Help

But this is just the national picture. The type of market you’re in is going to vary a lot based on how much inventory is available. So, lean on a local real estate agent for insight into how your area stacks up.

Whether you’re buying or selling, understanding how the market is changing gives you a big advantage. Your agent has the latest data and local insights, so you know exactly what’s happening and how to navigate it.

How Beth Van Zee Can Help?

Remember, these trends represent the national picture. The market in your local Iowa community might look different based on available inventory. That’s why it’s crucial to lean on a local real estate expert like Beth Van Zee for insights on your specific area.

Whether you’re buying or selling in Iowa, understanding how the market is evolving gives you a significant advantage. Beth Van Zee has the latest data and local insights, so you know exactly what’s happening and how to navigate it effectively.

Bottom Line The real estate market is always in flux, and staying informed is key. Whether you’re buying or selling in Iowa, understanding this shift toward a balanced market can help you make smarter decisions. If you have any questions or need expert advice, don’t hesitate to reach out to Beth Van Zee, your dedicated Realtor in Iowa.