Was the first half of 2018 the peak of the housing market?
A majority of major markets seemed to have peak in the first half of 2018, according to sales data reported on in an article published by Seeking Alpha. In terms of the entire US housing market, Zillow has reported that home prices have dropped from March to April 2019, which is the first national drop since 2012. Additionally, the report identified 14 markets, including San Diego, where prices have likely peaked. More and more signs are pointing to a market that is cooling off, both locally in San Diego, and across other major markets. These signs include:
1.)Home sales declining in major markets
2.)Price reductions are increasing
3.)Days on market are increasing
4.)Inventory is growing as more homes are being listed
5.)Bidding wars are less prevalent
6.)Lending standards are becoming more lax
So what does this all mean? Are we headed towards another huge crash? According to many experts, no.With the strength of our economy paired with a housing shortage, stability in the market should continue, but rising prices likely will not. The slowdown is mainly observed in homes with the steepest prices. A year ago, an over-priced home may have 5 offers in the first week, but now buyers feel they have a bit more negotiating power and are less likely to pay premium record-setting prices. However, the more affordable homes are still selling within days of listing. If you have a home that is currently listed, managing your expectations in time it will take to sell, as well as pricing, is key. If you don’t believe you can get the asking price you want, then hang onto it and consider renting. The rental market is still riding on a high.