WRITTEN BY: MAX FITZGERALD
SEPTEMBER 2021

Historically, the transition into the fall months means that the real estate market begins to slow down. Active inventory levels, buyer demand, and the volume of closed sales all begin to taper off. Autumn is usually the downshift of the real estate market prior to the Holiday Market, which is historically the slowest time of the year for real estate.

However, with interest rates at historical lows, a strained supply of available homes to purchase, and exceedingly high buyer demand, will this 2021 Autumn real estate market follow its traditional path?

At Craft & Bauer, we do our best to contextualize the real estate market for buyers and sellers in its ever-changing dynamic. Please feel free to reach out to me directly if you ever need additional insight or clarification.

Why the Autumn Slowdown?

Outside of the context of real estate, autumn is historically a slower time of year. Why? Mainly because kids are back in school. Moving during the school year is extremely disruptive, so families opt to place their home search on hold and wait it out until the following Spring.

Just as buyers place their search on hold, many homeowners do not want to disrupt their children's school year and usually decide to hold off on selling until the Spring or Summer markets. To put this into context, in September there are roughly 12% fewer homes placed on the market versus June.

What About Current Inventory Levels?

It's quite obvious that inventory is extremely low. Over the last two weeks, the number of available homes to purchase dropped 5%, which has been the largest drop of the year. With the start of the Autumn Market, expect the inventory to continue to slowly drop from now through mid-November. This is setting the stage to a record low level to start 2022.

Compared to the 3-year average from 2017 to 2019 (intentionally omitting 2020 due to COVID skewing the data), there were 58% more active homes on the market versus today. Forecasting the Autumn Market on basic supply and demand principles, this extreme lack of supply will help keep the demand strong through the fall months.

Will Buyer Demand Slow?

Even though the market "should" be slowing down, the current demand readings remain at surprisingly high levels, even though there are so few homes coming on the market. The appetite to purchase remains very strong, which is one of the reasons why inventory has continued to remain low.

With so few choices, buyers are gobbling up everything that hits the market. Yet, as housing dives deeper into the Autumn Market, expect demand to continue to drop from now through mid-November with the start of the Holiday Market.

What Will This Mean for Sellers?

With a strained supply of available homes to purchase within a real estate market being fueled by historically low interest rates, the downshift into the 2021 Autumn Market should be less noticeable versus years prior.

For sellers, the only imperceivable change will be slightly fewer showings and slightly fewer offers due to a smaller number of buyers in the marketplace. A home that may have garnered 50 showings in a few days back in the Spring Market could see 25 during the Autumn Market.

The Bottom Line: Expect less activity with fewer homes coming on the market and fewer buyers looking for a home.

While this Autumn Market will not be as noticeable as the historical norm, there will still be fewer homes coming on the market, buyer demand will decrease, and due to this historically low interest rate environment, housing will not change much The calm of autumn means less activity and a cyclical change to housing.

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