Real estate agents polled by HomeLight have been unsure for many months what the real estate market will do next: even when trends and patterns have appeared since March 2020, they really don’t follow any of the received wisdom about how buyers’ and sellers’ markets cycle.

Instead, agents have looked at many factors that could raise inventory, one of the primary levers that has kept the sellers’ market so strong. Of course there are many possibilities, since increased lumber availability could boost new construction, a shift could happen to townhome and condo ownership for affordability, or buyers could focus on home improvement after discovering how low the inventory is, dropping some buyers out of the market.

However, one of the biggest levers that is being discussed currently is the idea of on-the-fence sellers who have delayed selling getting worried that the high current valuations are in jeopardy. Many current home values are in a position to fall if demand falls, so would-be sellers who get worried that a buyers’ market is coming may hop into the market, hoping to catch high demand before it falls.

Is this possible fear-of-missing-out motivation likely to really unlock inventory? There are two schools of thought on the idea.

Yes: If Sellers List Soon and Find Their Ideal Buyers

Sellers who jump in right now are likely to continue to see the kinds of sales that have become characteristic of the past few months: high interest from a lot of buyers, contingencies waived and high, even above-asking, offers, and smoother paths to closing with cash buyers.

That being said, buyers still have their tastes, so checking how comparable homes have been selling is essential to know whether the predominant trends will hold for new listings. As people have grown accustomed to the very high valuations and sale prices, it’s possible to list too high and be seen as out-of-touch with a particular neighborhood. Sellers who want to cash in but also want to find the right pool of buyers with their list price should talk to a real estate agent, especially if they are also doing the tricky dance of buying and selling at the same time.

No: If Sellers Hop on the Trend After Interest Rates Rise

One of the ways that fear of missing out could play out, though, is that sellers could hold off too long and jump in after the market begins shifting. A big lever that could change demand is interest rates, since as they grow, fewer buyers will be as motivated to find their next dream house fast. Prices that seemed doable with lower interest rates will seem more out of reach when interest rates reach 4% or 5%.

If sellers choose to wait this long, there will likely be a large influx of inventory, as those who really were on the cusp of selling hurry to catch the tail end of the sellers market. A bigger amount of inventory, paradoxically, will just hurry the buyers market along even faster, so sellers who wait for a bit longer in their state of hemming and hawing could miss out and sell for less than expected.