We may be seeing some early indications that a move toward a balanced market is coming.
Today I’ll lay out the present and future outlook for our market.
It’s no secret that we’ve been steeped in a seller’s market for a number of years. For buyers entertaining the idea of making their move this year, there are some recent trends to keep an eye on as we move further into 2019.
A good sign for buyers is that all of the hallmarks of a seller’s market, such as high demand, escalating prices, and bidding wars, have started to slow: In the last 30 days, 25% of homes in our area have undergone a price cut, which is a substantial drop.
In addition, the percentage of homes selling at their original list price has dipped from where it was in July of this past year, a time when sellers, on average, could expect to receive 100% of their asking price. Though it seems like a marginal decrease—from 100% to 98.8%—the number of sellers who sold at original list price in December 2018 was lower than in December of the previous year. That fact alone certainly suggests a bit of a slowdown.
This isn’t to say that expectations are anywhere near the outcome of the 2008 market, when the bottom did fall out of the market and people became desperate. But the market does seem to be flattening and moving toward a balanced market.
So what should you do with this information as a buyer?
You may have known the answer ahead of time, but if you’re someone who’s looking to buy soon, I strongly encourage you to consider doing so now. First, mortgage rates are steadily rising, and at the pace they’re moving, they could cancel out any decline in home prices.
Second, long-term trends tell us that prices always have and always will go up. For an example of this, look no further than housing market performance between 2008 and 2018: Things crashed in 2008, recovered in 2013, and average home prices have increased by an average of $70,000 since.
If you have any other questions about your buying objectives in 2019 or for help with any and all of your real estate needs, don’t hesitate to contact us. We’d be glad to help!