The real estate market has been chugging right along the last year and a half. If you had a home to sell it would sell relatively quickly, almost regardless of its condition. But are things changing in the market? In this short write up we’ll go over just that and what market experts are saying.
It seems that prices may have reach their tipping point. It looks like more home owners are having to lower prices throughout the U.S. to get their properties to sell. It does seem that home buyers are tired of the bidding wars and rising to record highs. This is covered in an article by CNBC that talks about how bidding wars are down –
In September, 11% of offers written by Redfin, a national real estate brokerage, faced a bidding war. That is down dramatically from 41% a year ago, but up from the 10% reading in August.
That might not seem like a big deal, but in the past four years, the bidding war rate has dropped — not increased — from August to September.
The bidding war rate usually falls about 15 percentage points from the height of the housing season in March to the beginning of the slow season in September, at least according to seasonal patterns from 2013 to 2018.
What’s Causing The Downturn?
It could be that first time home buyers are scared about the economy. Trade wars could be a concern. Many people listen to the news that talks about a recession coming in the near future which could impact their jobs.
One bright point, the Federal Reserve is lowering interest rates which may help give the housing market a boost.
Are We Headed For Another Crash?
There has been talk in circles that another housing market crash is on the way for a while. Do we believe it? Not really, at least not as bad as what happened in 2007. Here is a little bit of an article from a market expert that explains why –
So Are We Headed For Another Housing Crisis?
In all actuality, we don’t think so. There were two major factors that really had an effect on the crash of ’07-’08.
- First, there were a lot of homes available. Builders were going crazy putting up new subdivisions everywhere throughout the Metro Atlanta area. The supply far outweighed the demand.
- Second, Banks and Mortgage companies were making very risky loans and basically lending money to people that couldn’t afford to make the payments. Since the crash though lending standards have tightened up, to a degree.
It’s important to note that the vast housing supply wasn’t just in Atlanta, but all around the United States.
What Do We Think?
Actually we think the housing market is still very strong and will remain that way, especially if the Fed continues to lower their rates. To us it looks like consumer confidence is up, however, we don’t have a crystal ball. The market could go in any direction. The best advice we can give – if you are in a position to buy a house and find one that you like and can afford – buy it. If you are a homeowner thinking of selling – there probably isn’t a better time than now.