Why A Normal Market is Just What We Need

The housing market has been hot for a while now. Homes have been flying off the shelves as fast as they have been listed. Buyers have been competing in bidding wars just to find a home to buy, let alone find their dream home.

This ‘seller’s market’ has driven home prices to new heights. Home price appreciation averaged over 6% across the country.

However, home price growth has recently started to cool down. The latest report from CoreLogic shows that home prices have only risen by 4.7% over the last 12 months.

Many buyers and sellers planning to enter the housing market this year have started to wonder if we are headed towards another housing crash. Ralph McLaughlin, Deputy Chief Economist at CoreLogic, recently stated in an interview,

“There’s no reason to panic right now, even if we may be headed for a recession. We’re seeing a cooling of the housing market, but nothing that indicates a crash.

The real elephant in the room here is housing supply.”

The simple answer is we are returning to a ‘normal’ market. The inventory of homes for sale more closely matches the demand in the market. The added supply means fewer buyers are outbidding each other. Therefore, prices are experiencing less upward pressure. McLaughlin went on to explain,

“If there are a lot of homes on the market and suddenly no one wants to buy them, you’ll get into a downward spiral of price competition. Right now, however, we’re in the opposite situation, there isn’t an over-abundance of homes on the market.”

As more renters looking for their piece of the American Dream enter the housing market, demand for housing will continue to grow. The Joint Center for Housing Studies at Harvard University estimates over 30 million new households will enter the market from now through 2040.

“There’s the natural life cycle of young people getting older and starting to do adult life things which include … buying a house and that’s a lot of potential inertia that could last indefinitely.”

Bottom Line

Home prices will start to appreciate by historical norms as we continue to head towards a more ‘normal’ market, rather than the over 6% seen over the course of the last couple of years. This is great news! Homeowners looking to sell their home will have buyers, as more buyers will be able to afford them!

WRITTEN BY:

Exceptional Negotiator – No one fights harder for You! The best tools, exceptional marketing, & personal service, to achieve the best results for you. I am a pleaser! I am at my best when I am helping others. I started off early in life working on houses, from simple electrical issues to small patch jobs. Over the years I have built a number of homes, stick to ICF (Insulated Concrete Block), installed rocks walls, patios, decks, ponds with water falls, and underground irrigation systems. Figuring out how to fix or make something better is a challenge I welcome. For the last 25+ years I have owned a few large format printing companies, an outdoor advertising company, and a property management company. Today I am CAM (Community Association Management) certified, allowing me to manage Condominiums Associations and Home Owners Associations. I use the Matterport 3D Virtual Reality camera system – allowing me to capture your property and bring the full “Walk Through” experience of your property to the on-line world. I also use the industries best Drone systems, and I am Federal Drone Commercial Certified – allows me to fly a Drone and film your property from up to 400′ in the air. Please go to the 3DSellsMore tab for more details on the Matterport and the Drone Services.

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