google-site-verification=xO4V1iJzxFqIsUm17Mw7uW1jEmlSRLwDz3xxXpR1LmE

Why A Normal Market Is Just What We Need

Dated: 02/20/2019

Views: 68

Why A Normal Market is Just What We Need | MyKCM

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!

Thinking of Relocating to SWFLA ?  > Contact the Real Estate Experts at Charlotte County Properties

Get Your Free Copy of our Buyers or Sellers eGuides on the things you should consider before Buying or Selling
Image title

Blog author image

Leo Albanes

I am a Licensed Florida Real Estate Broker, Realtor®, and Owner of Charlotte County Properties Inc for over 16 years. In that time, I have received many review, awards and testimonials demonstrating....

Latest Blog Posts

Rent Vs Own INFOGRAPHIC

Rent Vs. Own [INFOGRAPHIC]Some Highlights: Owning your own home vs. renting may lead to some great options, such as locking in your monthly payments and having the freedom to customize your

Read More

Consumer Confidence In Housing At An All Time High

Fannie Mae just released the July edition of their Home Purchase Sentiment Index (HPSI). The HPSI takes information regarding consumers’ confidence in the real estate market from

Read More

How Much Do You Know About Down Payments

Whether you’ve owned a home before, or you’re ready to jump into homeownership for the first time, there are always a lot of questions swirling around about what is truly required for a down

Read More

Millionaire To Millennials The Costly Mistake Of Not Buying Now

On his personal website, self-made millionaire David Bach makes a striking statement:  “Not prioritizing homeownership is the single biggest mistake millennials are making.”

Read More