An overview of the market trends resulting in this seller’s market.
Even if you don’t own a house, you’ve probably wondered when this current real estate market is going to crash.
I don’t have a crystal ball. And, this isn’t a prediction as much as it is an assessment of the current environment.
I hope you will walk away with a good overview of what’s going on in the current real estate market. And a comfort level that things will be good for at least the the next 6 to 12 months:
1. Median sales price in our MLS. The median price for single-family houses has risen consistently over the past 10 years.
2. Inventory. The number of houses people are buying per month compared to how many houses are presently available in our market continues (absorption rate) to decrease. Where there is not enough supply and demand is still strong, prices go up.
3. Interest rates. Over the last 35 to 40 years, interest rates have been on a steady decline. Today they’re hovering around or below 3%. This is as low as rates have ever been.
4. New construction. Today we have a larger population and less new construction happening. For example, between 2011 and 2012 there were about 500,000 new homes being built per month. Back in the mid-1970s, around 2.5 million new homes were built per month.
With all of these factors in play, unless something crazy happens with interest rates or new/existing home inventory coming on the market, we’re going to see a hot seller’s market for the next six to 12 months. I think that we will get back to a balanced market eventually, but that’s just not going to happen tomorrow.
I hope this was helpful. If you have any questions about it or how it applies to a home you’re thinking about selling or buying, I’d love to hear from you. Contact me at 904-405-1995 or firstname.lastname@example.org. Talk to you soon.