Our real estate market has been wonderful the last few years! The inventory for homes under luxury price range has been quite low, which has caused significant growth in appreciation in our market!
Homes have sold in record times. Multiple offers have been common as well as homes selling for more than the asking price. If you were a seller during the past two- three years, you most likely had a big smile on your face.
Buyers in the last few years have been frustrated by having to compete with multiple offers on most if not many of the homes they liked. Offered prices had to be above list price to be competitive.
Now, however, we are seeing a slow down in the market. It started in July and has continued. It is still a very good market mind you- but we have noticed the pace of homes sales has slowed and while we are still experiencing multiple offers and a lack of inventory- it is not at the same pace we saw earlier.
Is this good news or bad news? Actually- it is good news. Historically, home value appreciation is about 2.4 %. In our area, we typically see about 2.5-3%. For the last 2 or 3 years, we saw appreciation in the 5-7% range. At first, this was simply catching up to the horrendous fall in values we saw during the recession. However, it is hard to maintain high levels of appreciation year over year without there being negative consequences. If a market outpaces the economic drivers for its region, then home values will rise at a rate far greater than incomes so that eventually, the bubble will burst. Once a bubble bursts, the market has to go through a 2-3 cycle where values drop or are stagnant before they can rise again.
This we see a lot in California and Manhattan markets.
Looking forward into 2019, we see a slowing in the rise of home prices- to a more typical 2-3% range.
Interest rates are on the rise- we are now about 5.5%. This is a full percentage point ahead of where we were even earlier this year. However, while this seems high, remember we have been enjoying very low rates for several years.
Inventory is still low, but it is a great time to be a buyer and a seller!
Sellers may not be able to sell "as is" as readily as they have in the past two years. Properties will need to look their best both in terms of eye appeal but also in terms of condition in order to command higher prices. Buyers will still need to pay close to asking but will be able to negotiate more repairs most likely.
In other words, we are moving into a more balanced market!
Whether you are looking to buy or to sell- I am here for you! I have been practicing real estate for over 28 years. The experience and perspective I bring to the process helps you to achieve your goals in a timely and satisfying way!
Whenever I can help you or someone you know, please give me a call or send an email!
Have a wonderful day!