The latest housing market forecast is in, and it will come as a relief for property buyers, who have been feeling the heat of an ultra-competitive, incredibly fast housing market since the beginning of the pandemic.
As we enter the pre-Christmas home buying period, buyers can relax a little in the knowledge that there are early signs of a market that is finally slowing down a little. This means that you shouldn't necessarily rush to close a sale right now, because home prices are unlikely to spike significantly in the coming months.
Of course, home prices are still high. According to Redfin, they remained 15 percent higher as of August 29 than the same time a year ago. However, there are other signs besides home prices that the housing market is stabilizing.
For one, the number of home sales is decreasing – there were eight percent fewer pending home sales in August than there had been during the 2021 peak in late May. The same decrease in percentage has occurred for the number of home listings that have gone under contract within a week. Again, while these numbers remain high, at 35 percent of all listings selling within just one week, the trend is for homes to take longer to sell.
This in turn is having a positive effect on the way that sellers are pricing homes, with a significant minority now slashing their prices. An average of five percent of all home listings came with a price drop every week in August – the highest percentage since the four-week period ending October 13, 2019, well before the pandemic.
If these numbers sound encouragingly small, buyers should think about them in light of the overall trend, which is towards sellers rethinking over-inflating their prices, and towards buyers having more time to think about a house sale. As Redfin Chief Economist Daryl Fairweather points out, the housing market has clearly become slightly more favorable to buyers. Homes are taking longer to sell, which gives buyers more time to make thoughtful decisions about whether to make offers.'
Daryl actually encourages buyers to not to rush the decision to buy, given that 'home prices have plateaued.' It's finally time to breathe a little in the knowledge that prices won't rise dramatically by the end of the year. Moreover, 'the fact that more sellers are dropping their list price is a sign that sellers have to be realistic about their price expectations.'
With this return of something resembling normality, if you are thinking of buying a home, you can finally expect to do it on your own terms and within a timeframe that suits you. Of course, the hottest metropolitan areas in places like Austin remain competitive, and buyers may benefit from expanding their search to areas that are cooling off.