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U.S. Housing Market Slows
Last Christmas, I went to Charlotte for some holiday cheer and to see some friends who had relocated to the Queen City. 2017 had been a great year for real estate and with all the articles in Forbes and our local paper predicting Raleigh to double in size between 2016 and 2026, I was feeling great about the housing market and my career in it. Ironically, the 3 friends I was visiting are all in real estate as well and whenever a group gets together, tales of transactions and the market always get swapped.
I was surprised when one of the smartest people I know, who analyzes real estate for a large bank, said we are heading for a market slow down. I scoffed and said: "Even Raleigh? We are growing and getting Amazon and Apple and your data doesn't match what I'm feeling..." (Note to self: when your Stanford MBA real estate friend backs up a statement with facts, it is probably more accurate than your opinion.)
The Wall Street Journal wrote an article about the Dallas housing market and how it is "a canary in the coal mine" for other markets. Existing home sales have decrease for the past 8 months. As the economy recovered, housing prices increased faster than wages but historically low interest rates and cheap credit kept the market going. In 2018, mortgage rates have increase approximately 1%, making the same house more expensive to buy. New construction expanded and now there is a surplus of housing available which, of course, lowers demand...and price. Houses will take longer to sell, there are fewer bidding wars, and more price cuts.
It's not all Ghost of Christmas Past doom & gloom. There will still be homes bought and sold. The US economy needs the housing market to succeed. But the market has changed and so we need to adjust expectations and actions. BUYERS: Make sure your budget is accurate, given the higher interest rates, and always do your research on the comparable sales of your purchase and your loan. SELLERS: Expect longer days on market and more modest return on investment. Remember, your home is your nest...and your nest egg. Make the right decision for how you want to live today...and tomorrow.
Melanie Jones is a real estate broker in Raleigh and the greater Triangle area who is known for her tenacity and passion. The key to her success hinges on one thing: people. Melanie starts every trans....