It’s a Sellers Market – but it may shift to Buyers Soon
It's safe to say that housing conditions have favored sellers for quite a while. After all, the last time home values fell or held constant on an annual basis was back in 2012, according to the National Association of Realtors, and available properties currently hover around 1.9 million
But signs are emerging that suggest a market shift is beginning to take shape - an encouraging development for would-be buyers bound by a budget.
In September 2018, supply levels of homes for sale slipped just 0.2 percent, according to Realtor.com. That's substantially a reduced rate of decline in inventory compared to previous reports. But perhaps the more telling statistic is with regards to new listings, which rose an impressive 8 percent when contrasted with the same period in 2017. That's the largest uptick in five years.
Danielle Hale, Realtor.com chief economist, indicated that these most recent figures may serve as an inflection point that presages the dawn of a stretch that favors people looking to purchase.
After years of record-breaking inventory declines, September's almost flat inventory signals a big change in the real estate market," Hale predicted. "Would-be buyers who had been waiting for a bigger selection of homes for sale may finally see more listings materialize."
Home sales have slid since spring
A dive into the data suggested that this shift was in the making for quite some time. In August, existing-home sales flatlined from 12 months earlier, according to NAR's analysis. This made it five months in a row wherein residential real estate transactions dropped or stayed the same on a year-over-year basis. In year-to-date estimates, existing-home sales are about 1.5 percent lower versus the first eight months of 2017.
Lawrence Yun, chief economist for NAR, mentioned that purchase parity hasn't been nearly as apparent as of late.
"With inventory stabilizing and modestly rising, buyers appear ready to step back into the market," Yun explained.
Additionally, housing starts have picked up the pace. Indeed, in August, groundbreakings jumped more than 9 percent to a seasonally adjusted annual rate of 1.2 million units, an analysis conducted by the U.S. Census Bureau shows.
National Association of Home Builders Chairman Randy Noel said developers have been able to make up for lost time due to affordability concerns among families.
Even in the pricing aspect, sellers' market conditions appear to be on their last legs. Median list prices did rise in September, up 7 percent, according to Realtor.com, but that was down from the 10 percent increase 12 months ago. And among newly advertised properties, prices were
around $25,000 more affordable than houses already up for sale.
All this being said, Hale cautioned not to expect any major swings in favor of home shoppers.
"Plenty of buyers in the market are scooping up homes as soon as they're listed," Hale advised. "[This] will keep national increases relatively small for the time being."
However, if you've been anxiously awaiting the day when you can buy at a price that's in keeping with your financial allowances, that day may be in the not-too-distant future.
This article brought to you courtesy of Tim Hidell, RMS Mortgage. For full article, please click here.