The year-over-year numbers showed that we were seeing more homes listed for sale this year than there were last year.
However, over the last three months, it’s actually gone in the other direction - we need more homes for sale, desperately. Year over year, the gap between what we’re listing this year versus last year is getting worse. Without inventory, we will see less sales, and prices will start to reaccelerate.
For sellers, that’s a good thing, but for the overall housing market, the moderation in prices actually caused a drive of buyers to the market.
These are the results of a survey done by Nerd Wallet. Homeowners believe that there are more houses for sale this year than there were in the past. Forty-five percent of homeowners say that there are more homes for buyers to choose from in their communities now than there were a year ago, and 58% of homeowners looking to sell in the next 18 months say there are more homes available for buyers to pick from in their areas.
So, even though there are less homes for sale available, the consumer believes there are more homes available, which is going to cause them to not list their home now. Any seller who thinks there’s an abundance of inventory right now are going to wait until the spring to list their home for sale, because that’s a normal reaction every year anyway.
The number one reason to not wait until the spring is that the supply of homes for sale increases substantially, which would lower the demand for your home. Right now, buyer demand is actually increasing very dramatically. Most homes come to the market in April, May and June. So, if you are waiting for next spring’s buyer’s market, just keep in mind that is what your neighbors are waiting on, too. This means a dramatic increase into the competition for your home.
The “sweet spot” for sellers is from now all the way through March, because (in addition to increased competition) there will be an increase in new construction homes. New building permits are up 7.7% over this time last year.
Buyers looking for their home, have faced the headwinds of tight inventory, and a competitive market this year…While lower mortgage rates and the arrival of Fall promised a reprieve, conditions continue to tighten as demand remains strong.
George Ratiu, Senior Economist at realtor.com
We didn’t have a momentum going into 2019. Remember that interest rates skyrocketed at the end of the year last year and that cut any momentum going into the new year. We’re doing a reverse this time. The industry is building momentum right now and we’re going to be going into 2020 very strongly.
Total sales for the first nine months of 2019 (527,000) were 7.2% higher than the comparable total for 2018 (491,000). We expect sales volume to continue to trend up slightly in the coming months as more new homes are built.
The National Association of Homebuilders
According to Freddie Mac, interest rates will remain pretty much where they are for the next year. Right now, we’re in a great market if you’re looking to buy a house whether you’re moving up, moving down, or you’re a first-time homebuyer - interest rates there.
It’s important to note the recession is not going to impact prices. Here are the six organizations that project prices: The Home Price Expectation Survey, the Mortgage Bankers Association, Zelman and Associates, Freddie Mac, the National Association of Realtors and Fannie Mae. There are no red numbers in any of their projections. None of the major entities are suggesting that prices are going to depreciate.
A survey just recently done by realtor.com showed that over 50% of people believe that this recession that’s coming in 2020 is going to be as bad or worse than it was in 2008 for the housing market. But here is the home price change during the last five recessions - going all the way back to 1980.
Prices dropped 19.7% in 2008 because it was a housing crash that caused the mortgage market meltdown. In the four recessions prior to that, only once did prices drop, and that was less than 2%. In the other three recessions, prices went up.
The top three triggers for the next recession are predicted to be caused by trade policy, stock market correction, or a geopolitical crisis. As a matter of fact, when you list all the triggers they think could cause the next recession, housing doesn’t come in until #9. It was #1 in 2008. So, if a recession is coming, it’s not going to have the same effect.
So... what's going on in Tallahassee?
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