4 Signs The Red Hot Real Estate Market Is Cooling Off
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The housing market has been smoldering for more than a year, but there are some signs that the red hot housing market might be cooling off. However, the housing market still might not be a buyer’s market any time soon.
Home prices spiked 19.8% year over year – the same record growth as in July, and up from June’s 18.7%, according to data from real estate data firm S&P CoreLogic Case-Shiller. Sales of existing homes sales increased 7% in September, according to the National Association of Realtors. But there are some signs that the housing market is starting to cool.
Home Prices Are Expected To Decrease
Freddie Mac and the Mortgage Bankers Association predict total 2022 price increases in the 5% to 7% range. CoreLogic forecast only a 2.2% home price growth over the next 12 months.
Bidding Wars Are Decreasing
In April, Redfin noted that bidding wars hit a peak of 74.3%. The percent has fallen every month – dropping to 60.8% in August and 58.9% in September – on par with the level seen in January.
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Houses Are On The Market Longer
Since June, the number of days that homes stay on the market has gotten longer – going from 37 days to 45 days in October.
More Affordable Listings
New listings characterized as “most affordable” (homes with a median price of $126,500) increased 32% between the third quarter of 2020 and 2021. Homes in the “affordable” category (Houses with a median price of $210,000) increased by 16%.
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What The Experts Are Saying
“The housing market has absolutely cooled from where it was this past winter and spring,” said Greg Aponte – head of business intelligence and data science at real estate platform Orchard. “It’s not completely cool — just cooler from what it once was.”
“When looking at those figures, it’s easy to say that it’s cooling down, but that simply indicates that we’re heading into a much healthier housing market,” explains Marcus Larrea – broker associate at Palm Paradise Real Estate in Florida. “A healthy, balanced market typically sees appreciation of approximately 3% each year.”
“Most areas of the country have seen a decline in the number of homes receiving multiple offers that are way over list price,” noted Glenn Phillips – CEO at Lake Homes Realty. “This behavior has not ended — it’s just not as common, and the aggressive bidding is more restrained now.”
“I think buyers definitely have an easier time than they had in the spring, but if they see a home that they like, they should plan on moving quickly,” according to Redfin’s chief economist Daryl Fairweather.
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