Monday, October 10, 2016

Your Latest Real Estate Market Update

The wonderful world of real estate tends to run in cycles. Our market is shifting right now, so there are a few market trends that you need to be aware of.

As we all know, the wonderful world of real estate runs in cycles. There are times when the market is up, times when the market is down, and in-between times when the market seems flat. For those of us who have been through multiple upswings and downturns over the years, the worst downturn we’ve seen lasted from 2006 to mid-2011.

If you look at most cycles in real estate, we typically have four or five years of a really good market and then 12 to 36 months of an adjustment or downswing before starting that upward cycle again.

Since the recovery from the Great Recession began in mid-2011, it would only be natural for us to hit the next real estate cycle soon because it has been about five years since our last major downturn.

So, what are the signs of a market adjustment? Typically we will see increased inventory, more days on market, and frequent price reductions. This is exactly what we have seen over the last 10 months, and the market continues to adjust today.

What is causing the adjustment? As mentioned, we have had the five-year recovery period already, and it is time for the market to adjust. We are also experiencing enormous uncertainty in the stock market in the wake of Brexit; this causes people to slow down when it comes to purchasing a home, as some may not have enough money for a down payment. The uncertainty also slows down the market in the upper price points.

At the same time, we are in an election year. Election years cause economic concern and slow down the real estate market. Unfortunately, there have also been both national and international acts of terrorism, which further breed fear, uncertainty, and caution in our market.

Overall, the real estate market is doing great.

That said, it’s not all doom and gloom. The market isn’t going down anytime soon. My team and I cover 25 different cities in three major counties, and we are on track to help more than 60 families buy or sell a home anywhere from $400,000 to $2.5 million. In short, I have a direct pulse on what’s taking place in our market.

The good news is that homes are still selling and buyers are still taking advantage of the historically low interest rates, which means demand remains strong.

We are starting to see the market slow down in the higher price points of any market. In some cases, the top end of each market is starting to show signs of a buyer’s market. However, in the bottom three-quarters of the market, we are still experiencing a seller’s market. It’s not that insane seller’s market where there were 10 or 15 offers per property, though. Instead, the remaining three-quarters of the market is fairly healthy.

Overall, the real estate market is doing great. I would just say that you need to expect a little more volatility throughout the year. If you want more details about the market in your city or if you have any other questions, give me a call or send me an email. I would be happy to help you!