Is it a Buyer’s Market Again?
In the ten-plus years since the Great Recession, we’ve seen a struggling real estate market recover almost entirely. Home prices fell 33% across the US during the recession, but have rebounded nearly 50% since hitting rock bottom Statistics like this leave a lot of buyers wondering: are we in for another recession? Should we hold off on buying a home until the market drops? Should we sell now, before it’s too late?As is the case with most real estate opportunities, there isn’t one clear answer.
The market has certainly slowed down in the past year, with prices hitting their peak in June 2018, and though prices have steadily risen, sales have dropped anywhere from 8%-22% across Southern California. We’re seeing homes stay on the market longer than we were this time last year, but shouldn’t ring recession alarm bells. The market is pausing and the gap between supply and demand is closing. While we may see a short-term price slump, it’s highly unlikely that we’ll see another Great Recession.
With so many potential buyers interested in living the California dream, West Coast real estate is still in high demand. There’s long been a shortage of housing in this state — particularly affordable housing — and this serves to drive the market in ways that don’t align with national trends and predictions.
High prices, high rates, high supply
From 2012 to early 2018, the housing market was fueled by a combination of low supply and low interest rates. Home values have appreciated at unprecedented rates, and the median sales price recently reached a record $739,000. With record high home prices, rising interest rates, and an abundance of homes on the market, buyers have less incentive to move fast and provide competitive offers
So, who is in control of the market?
We’ve all heard the advice “It’s a good time to buy” and “it’s a good time to sell” — these phrases are thrown around so frequently that we’re led to believe there are just as often Today’s market is not controlled by the buyers, but they do have more choices now. They no longer have to rush to be the first to see a home or make an offer; they’re finally able to approach the market relaxed and strategically.And sellers should note that accurate pricing is crucial to their real estate success. In spite of the news that homes have reached a record median sale price, properties are not (and will not) continue to appreciate at the same rate.
Today’s market is seeing more homes for sale, which means more competition among sellers and less among buyers. If you’re hoping to sell quickly, avoid overpricing your home. Listing your home for its fair market value is the best recipe for success.
Diving into market research before you decide to buy or sell is never a bad idea, but there are experts out there who have the insight and knowledge to help you make an informed decision. Whenever you’re ready, our team of professionals is here to walk you through all of your options.
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