Housing market shows signs of normalizing

If you’ve been waiting out the housing market hoping it might get back to something like normal … well, we’re not there yet.

But there are signs that competition is loosening up a bit: Houses are staying on the market a few more days, and there are more new listings and fewer bidding wars.

Some of that is seasonal, as families get back to school routines and people are less inclined to make big moves. But what does a “normal” season even look like anymore?

In 2020, the usual seasonality of the housing market went out the window “because the spring was so disrupted by the unfolding pandemic,” said Danielle Hale, chief economist with Realtor.com. “And then, in the fall, when the housing market normally cools down, a lot of buyers and sellers were playing catch-up and trying to make up for that missed spring homebuying season.”

This year, after a truly crazy spring and summer, Hale expects some of the typical fall patterns to come back. “Where homes sit a little bit longer, sell for a little bit less than top dollar, yet buyers still have a decent number of options to choose from,” she said.

In fact, she said this week is considered the best time to buy in major markets like Los Angeles, Denver, Boston and New York City.

Minneapolis agent Raashida Shelton with Keller Williams has noticed things getting easier for buyers. Instead of houses selling in two to three days, “now we’re seeing more inventory, and homes are sitting longer, more like 20 to 30 days,” she said.

She just closed a deal in which the seller even covered some of the costs. Imagine that — a concession from a seller!

We’re still a ways off from a “normal” market, though, according to Taylor Marr, lead economist with Redfin — when prices go up in the single digits annually, instead of the double digits we’ve been seeing.

“What we are seeing is that more homes are hitting the market every single week. And so that’s relieving a little bit of the pressure,” Marr said. “But what’s amazing is just how much demand there is standing in line to snatch up those homes.”

And he doesn’t expect that demand to cool much until mortgage interest rates start to rise.