Get Ready for a Competitive Home Shopping Season: Zillow's Spring Market Report

As the spring season approaches, both buyers and sellers should gear up for what promises to be a competitive period in the housing market. The latest market report from Zillow indicates a landscape where well-priced homes are swiftly snatched up, while properties that linger on the market often see reductions in asking prices.

Zillow's Chief Economist, Skylar Olsen, notes that while some homes may simply need better digital presentation to attract buyers, many others are likely overpriced. Despite a slightly higher inventory compared to the previous year, there remains robust competition for appropriately priced houses. Olsen advises buyers to prepare their credit scores, while sellers should ensure their properties are primed for listing, as attractive offerings are going pending in less than a month.

Buyers' Perspective

In January, over one in five homes listed on Zillow experienced a price cut, a trend more pronounced than in recent years. These adjustments are aligning seller expectations with market realities, with the typical sold home spending just 29 days on the market before going pending. 

While there's been a modest increase in inventory compared to the previous year, the flow of new listings is also up. January typically witnesses a surge in new inventory, but this year's boost was relatively conservative, consistent with trends from recent years.

Sellers' Perspective

Despite the competitive landscape, sellers continue to benefit from record home equity. The typical U.S. home value has surged by nearly $100,000 since 2020, now averaging $344,159. Nationally, home values are appreciating at a healthy rate of 3.6% annually, with only a handful of major metros experiencing declines.

In December, more than a quarter of homes sold for more than their asking prices, indicating continued seller advantage. Although fewer homes are selling over list price compared to the early pandemic period, the figure remains higher than pre-pandemic levels.

What to Expect

Looking ahead, the housing market is poised to remain competitive, driven by demographic factors and a robust economy. Millennials and baby boomers alike are actively seeking homes, despite ongoing affordability challenges.

For buyers, it's crucial to organize their finances, consult with loan officers, and search for properties within their budget. Sellers, on the other hand, should collaborate with agents who possess a deep understanding of local market dynamics and accurately price their homes. Enhancing online curb appeal through platforms like Zillow's Listing Showcase can also help properties stand out in a crowded market.

As the spring market unfolds, both buyers and sellers must be proactive and strategic to navigate the evolving landscape successfully. With preparation and the right approach, this season presents ample opportunities for those entering the housing market.