Housing Supply Increased and Sales Slow Down
Why Has Housing Supply Increased as Sales Have Slowed Down?
What’s the real deal with housing supply and it’s impact on home buyers?
According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the inventory of homes for sale this year compared to last year has increased for the last four months, all while sales of existing homes have slowed compared to last year’s numbers.
For over three years leading up to this point, the exact opposite was true; Inventory dropped as sales soared.
NAR’s Chief Economist Lawrence Yun shed some light on what could be contributing to this shift,
“This is the lowest existing home sales level since November 2015. A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country.”
Let’s take a deeper look:
Since January, 30-year fixed mortgage interest rates have increased nearly a full percentage point (from 3.95% to 4.9%). Fannie Mae, Freddie Mac, the National Association of Realtors, and the Mortgage Bankers Association are all in agreement that rates will continue to increase to about 5.2% over the next 12 months.
“The rise in [mortgage] rates paired with this very strong price appreciation absolutely is slowing housing,” saidFannie Mae’s Chief Economist Doug Duncan.
Even though rates are higher than they’ve been in a decade, they still remain below the average for the 1970s, 80s, 90s, and 2000s!
Mismatch of Inventory
Elizabeth Mendenhall, President of NAR, said it best, “Despite small month over month increases, the share of first-time buyers in the market continues to underwhelm because there are simply not enough listings in their price range.”
Prices of starter and trade-up homes have appreciated faster than their higher-priced counterparts. Over the last 5 years, the lowest-priced homes have appreciated by 47% while the highest-priced homes have appreciated by only 24%.
According to the Institute of Luxury Home Market’s Luxury Market Report, the $1M-and-up price range is now experiencing a buyer’s market. This means that supply (inventory) has finally caught up with demand and buyers are in the driver’s seat when it comes to negotiations. Additionally, many listings in this price range have experienced price cuts in order to entice buyers to put in offers.
Although not fully to blame for the national shortage in sales and inventory, natural disasters like Hurricane Florence, Hurricane Michael, and the wildfires on the West Coast have certainly had an impact.
Additional inventory coming to market could help normalize the housing market and allow incomes to catch up to home prices. For more information about sales and housing supply in our area, let’s get together so we can help you make the best decision for you and your family.
Begin Your Own Property Search:
So, if you’re ready to begin your search for your Southwest Florida Luxury dream home or condo, I encourage you to explore my website to find information about communities in the area. If golf is your game, I specialize in golf community real estate and would be happy to help you navigate the more than 100 different golf communities in our area. If you prefer a more direct approach, I will provide a list of properties that meet your criteria and/or communities that meet your needs.
Also, if you are considering a newly constructed home, remember the contractor’s real estate agent represents the builder’s best interest, not yours. There is no cost to you to have an agent represent you. In fact, I may be able to help you save money and negotiate for extras which the builder may not let you know about.
Lastly, I will handle all contract negotiations for your property from offer to close!
Considering Selling your home?
If you are looking to sell a home in Bonita Springs, Estero or Naples, I encourage you work with a REALTOR® who has the experience and knowledge to provide an accurate market comparison so you can determine the right asking price. If you live in a golf community in southwest Florida, you are competing with more than 100 other golf communities. Contact me today to learn how your home or condo stacks up against the competition and how we can position your property to sell quickly and for a fair price.
Let’s Get Started:
If you’re looking for a focused and goal-oriented Realtor in Naples, Bonita Springs or Estero who will help you achieve your Real Estate needs, please reach out to me directly.
Additionally, if you are looking for a golf community expert or you are considering buying or selling a home, a luxury home, luxury vacation home, luxury golf home or dream home, call me or text me on my mobile phone at 239-370-0892 or email me at Matt@NaplesGolfGuy.com
About Matthew Klinowski, PA
Contact Matt: Matt@NaplesGolfGuy.com
November 8, 2018 Posted by Matt