The latest onslaught of “price corrections” on existing inventory coupled with thoughts of “where have all the buyers gone” may lead us to believe the market is heading downwards.
Is the market truly heading downward? Well, according to NAR’s chief economist Lawrence Yun, “Mortgage rates are at historically low levels, so I see no sign of the optimism about home buying fading,” he said. “However, the fact that slightly fewer are expressing strong intensity compared to recent prior quarters is implying some would-be buyers have concerns about the direction of the economy.”
So maybe that’s it. Buyers are becoming more cautious since they have concerns over the economy. That would help explain why there seems to be many fewer buyers than just a month or two ago. Fewer buyers means fewer showings. Fewer showings means fewer offers on homes. Fewer offers causes sellers to become more impatient than in the past and perhaps, that’s what’s causing all of these price drops.
Buyers are still out there but not with the same intensity we’ve seen in the past. In fact, according to NAR’s 3rd quarter Housing Opportunities and Marketing Experience Survey (HOME), 63% of the 2,705 households surveyed, indicated it was a good time to buy a home with 34% of them strongly believing now is a good time to buy.
And perhaps these signals are just cyclical in nature and is what we can expect during this time of year. After all, we are still ahead of August ’18 on multiple fronts: closed sales, sales price, and inventory.
Copyright ©2019 “HOME Survey: Housing Opportunities and Market Experience. September 2019” National Association of Realtors. All rights reserved. Reprinted with permission.