Transition from seller’s to buyer’s market may slowly be taking place

The real estate tide is turning, according to Fortune Magazine’s Chris Morris. What was once a seller’s market, complete with frenzied offers and multiple bidding, is beginning to smooth a bit, becoming what Realtors refer to as a “balanced market” where homes stay on the market a tad longer, and buyers actually have a chance to negotiate.

The National Association of Realtors says existing home sales in January dropped to their lowest level in three years, with existing home sales down 1.2% to an adjusted annual rate of 4.94 million units last month. That’s below analyst expectations and an 8.5% drop from a year ago. According to their stats, only the Northeast saw a rise in sales activity.

And while home prices are still showing increases, they’re nowhere close to the rise we saw in recent years. The median price of an existing house climbed 2.8% in January to $247,500, the smallest increase since February 2012. According to the article, prices have increased for 83 consecutive months, but experts are now saying that trend could be ending. All that means is that buyers now have a chance to participate in the American Dream.

“The number of homes on the market is starting to rise, too, meaning buyers have a wider selection to choose from,” says Morris. “In January, there were 1.59 million previously owned homes on the market, compared to 1.53 million in December. The average home stayed on the market 49 days, a week longer than January 2018.” Forbes real estate also predicts the wave of first-time home buyer demand will be met by somewhat higher inventory levels than in 2018, according to a year-end article by Aly Yale.

Morris goes on to cite the NAR’s chief economist, Lawrence Yun: “Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.”

So if you’ve got a house on the market, patience is a virtue, along with pricing it to sell. And if you’re in the market to buy, prepare to have more to choose from.

Source: Fortune, Forbes, NAR, TBWS

Rates Currently Trending: Neutral

Mortgage rates are trending sideways this morning.  Last week the MBS market improved by +10bps.  This caused rates to move mostly sideways for the week. We saw low rate volatility through the week.

About the Author

Tim Morissette, also known in the community as Mr. Foothill Ranch, offers over 46 years of real estate experience which has given him an established reputation and unmatched market knowledge. He is joined by his wife, Michele and sons Matt and Jeff, as they continue to offer personal service with an emphasis on achieving his clients’ real estate goals.  This unique combination of traits has led to his proven track record of referral and repeat business. This can be witnessed by the trust of homeowners in Foothill Ranch where he has sold twice as many homes and represented three times more buyers than the next-leading real estate agent for the last 26 years.

As residents of Foothill Ranch since 1994, Tim and Michele are actively involved in the community by fundraising for Foothill Ranch Library, Make-a-Wish Foundation, Cancer Society, Homes for Habitat, Relay for Life, South County Outreach, and the local church and schools. Tim enjoys sponsoring community-wide garage sales, paper shredding and e-waste recycling event, an Easter egg hunt, & a Meet Santa Event.

Tim and Michele are dedicated to their family of four sons, daughter-in-laws, and grandchildren. As a family, they enjoy many outdoor activities which include camping, spearfishing, mountain climbing and exploring the miles of hiking and equestrian trails in Foothill Ranch and the Whiting Ranch Wilderness Park. Tim and his sons are also avid snowboarders and enjoy mountain biking and lobster diving. Family is a top priority in the Morissette household. They look forward to helping more families achieve their dreams of homeownership.