Unlike a typical spring homebuying season in which sellers are also looking to buy a home, people trying to relocate into a bigger or smaller home in the Mid-Atlantic region made up a relatively small share of the housing market.
Move-up buyers made up just 11% of sellers in May, while those looking for a smaller home accounted for 12% of all sellers. In comparison, 32.4% of sales were rental or investment properties or second homes, according to a survey of 1,063 listing agents.
“With inventory so low and many homeowners reluctant to give up their extremely low mortgage rates, everyone is wondering where new listings are going to come from. We’re starting to see more sellers who are listing second homes and investment properties,” said Lisa Sturtevant, the chief economist of Bright MLS, which conducted the survey.
Sturtevant noted that as workers are being called back to the office, fewer people are able to take advantage of those vacation getaways that were acquired during the pandemic, at a time when remote work was ubiquitous. Simultaneously, the short-term rental market has also slowed down, prompting some sellers to offload homes they had purchased specifically for that market.
According to Bright MLS, 56.5% of buyers in the region paid above the seller’s original list price. On average, these buyers paid 5.6% above the asking price and the most competitive segment of the market was among homes priced in the $500,000 to $699,999 range, where nearly two-thirds (62.9%) of all homes sold for more than the original asking price.
With limited inventory, it’s difficult to find a home: 45.8% of first-time homebuyers said they had a “very” or “somewhat” difficult time finding the right home. Lastly, buyers will outnumber sellers for the foreseeable future in the Mid-Atlantic region, according to Bright MLS. This month, 41% of survey respondents indicated that buyer activity would be “high to very high” in the next three months, down from 47.2% a month ago.