Is the market slowing down a bit?
Well, from where I’m standing, yes, we are seeing a slowdown, but don’t just take my word about the market slowing down. Let’s look at what the market is showing us.
Hi, I’m Jennifer Prestwich, The Prestwich Group at Madison and Company Properties, and I’ve been a residential realtor since 2008. Nationally, this is the first month that we have seen buyer demand go down since November. Also, according to the Home Purchase Sentiment Index, which is a survey asking buyers if they feel that now is a good time to purchase, those that say is a good time dropped from 61% last year down to 35% this year.
Buyer’s perception of the market is it’s not the best time to purchase. And this is in spite of historically low mortgage rates. In fact, over the last year, the average 30-year fixed rate has hit a low 16 times.
Buyers are feeling a little defeated. Factors contributing to buyers not wanting to pull the trigger?
First of all, record high percentage of homes selling over list price.
Then there’s record price appreciation. According to Case Shiller, homes across the country have appreciated at 14.6% this past year.
The third is record low days on market, or how long it takes a home to sell.
Number four, extremely low inventory, which is causing bidding wars.
Some good news is that we’re ahead of where we were last year at this time with buyer showings. I’ve seen this locally at all price points. Summer’s coming to an end and school’s back in session. Historically in our area, there’s a noticeable drop in sales and increased time on market at this time of year, as would-be home buyers take their summer vacations and then prepare for back-to-school time.
The good news for buyers is that inventory has actually gone up about 18%, which should make it a little easier for buyers as they’ll have more to choose from.
Also buyers, be aware that according to Freddie Mac, Fannie Mae, the Mortgage Bankers Association, and the National Association of Realtors, they’re forecasting that interest rates will go up, which means that if you wait, it will cost you more to borrow money for a home and you’ll qualify for less. So now may be a good time to buy.
According to J.P. Morgan Insights Report, and I quote, “Homebuyers interest rates are still historically low, though they are inching up. Housing prices have spiked during the last six to nine months, but,” and buyers, this is where you have to listen in, “but we don’t expect them to fall soon, and we believe that they are likely to keep rising.” If you’re looking to purchase a new home, “conditions now may be better than they are 12 months hence.”
I hope this information was helpful. Don’t forget, if you’re thinking of selling your home here in Adams or Broomfield counties, that’s my specialty. Remember, life is too short not to love where you live. I’m Jennifer Prestwich, The Prestwich Group at Madison and Company Properties. I’m out here living in the Denburbs life and I want to help you do it, too.