Starting to hear some different takes around the housing market cooling down. It is important to keep in mind the dynamics in play around simple supply and demand when analyzing any market, especially housing or real estate. Quick recap on what has taken place leading up to now in the last few years: not enough supply of homes for sale and a high demand of interested buyers, mainly due to low-interest rates, have led to an increase in pricing and what is commonly known as a “crazy market”. This cause and effect is pretty standard and a principle concept of the economics of supply and demand.
It is also important to understand that the “news” reports on current events in real-time, obviously. If you consume news about the housing market consistently, you will be tuned in to all aspects of it, especially the current supply and demand analysis and effect. In fact, most recent news shows near record-breaking positivity in the housing market (https://www.cnbc.com/2021/06/30/may-home-sales-rebound-to-highest-level-since-2005.html)
Currently, we are in the midst of experiencing a seasonal boost in supply. The demand side has been a little “funky” recently and can be partially attributed to frustrated buyers putting their plans on hold and many people that seem to be out enjoying Summer and a newfound sense of normalcy as we appear to be exiting out of COVID protocols from the last year plus. If you are a real estate professional or a buyer/seller in the market, this will probably make it seem like the intensity is changing. Essentially what is happening in the market currently is that the slight increases of supply are making the upward trending market pull back slightly. Everyone’s primary concern, which is pricing, is still rising but just not as fast or as strong as it was in months prior (https://www.msn.com/en-us/money/realestate/is-the-red-hot-housing-market-starting-to-cool/ar-AAKTSVv).
Don’t confuse these changes with a potential shift in the market. I wish I had a crystal ball, but I feel extremely confident to predict that we will not be shifting out of the extreme seller’s market in the immediate future (the next few months this Summer). Simply put, there is no end in sight to the fact that there are not enough homes available for sale. With that said, the key is to understand that we are coming off the peak of extreme conditions. So for buyers, that could mean that there is more opportunity now than there has been in the last few months, and for sellers, it will remain a seller's market and still be a great time to capitalize on selling your home. The demand will continue to outpace the supply, so gear up for a hot Summer! Stay tuned to the news in the Fall for the pulse of the market then, or just check back here!
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