Real estate hasn’t had the easiest of times since the housing market crash in 2008 but after a long and well-fought battle, the market has made a glorious comeback. The current norm, however, is starting to take form and its not either one of the recent extremes we have seen since the crash. The market has been easing into a lull where it is neither hot or cold all across America. Lawrence Yun, chief economist of the National Association of Realtors, says that previously this year the market was leaning more towards a seller’s market, but now things are balancing out. This isn’t our normal winter hibernation of real estate either, it is something that has been brewing longer than this season.
This past September, almost 465,000 listing surged into the market, adding an 8% increase of inventory to the supply. This is the largest growth of inventory since 2013, as well as an increase in new homes being built at about 3.5% year over year growth. Along with these trends, the values of homes are rising as well. The chance of having another housing market crash is not improbable, but very unlikely as this is not founded on mortgage fraud, as the 2008 crash was. This is just simply the basics of supply and demand. These trends are backed by homebuyers having more wiggle room with negotiations on pricing and not wanting to spend more than they can afford.
There are a few trends still to be expected by experts in the coming year as well. Mortgage rates are expected to continue to hit 5.5% next year, this is still a low compared to the 10% from the 90s, and hopefully, we don’t ever get back to that trend. Home values will see appreciation values increase at a slower rate, around 2%. Markets will see some fluctuation in how hot or cold they are based on taxes from local and state governments. Lastly, the entry-level housing market will still be on the higher end of the demand scale, as first-time buyers are entering the market as more jobs are being created around the country.