Media reports are increasingly focused on whether a major home
sale slowdown, or maybe even a crash, is in the making, in part because many hot housing markets are seeing slackening buyer demand, and nationally 2018 is expected to end with fewer home sales than 2017.
But the possibility of a crash is unlikely, says Lawrence Yun, chief economist for the National Association of REALTORS®.
In a piece he contributed to Forbes, Yun says hot markets are seeing a slowdown not because of weak buyer demand, which could be an indicator of a true slowdown, but insufficient supply. When homes come on the market, especially in areas like Seattle and Denver that have strong job growth and little unemployment, they are typically snapped up.
“That is why mortgage default and foreclosure rates are at historic lows.”
In short, Yun says, today’s housing problem stems from insufficient inventory. The supply problem is driving up home prices and worsening affordability and keeping sales from matching demand. That is a serious problem and the answer is to encourage builders to increase supply, Yun says, but it is not a prelude to a crash.
Selling or Buying your home is all about the details. Pay special attention to the simple steps above and always consult your realtor if you have any questions or need some guidance. When you work with a real estate professional Carriene Porter of Precision Realty & Associates, you’re guaranteed to get the expertise and advice you need to Buy your Dream home.
But the possibility of a crash is unlikely, says Lawrence Yun, chief economist for the National Association of REALTORS®.
In a piece he contributed to Forbes, Yun says hot markets are seeing a slowdown not because of weak buyer demand, which could be an indicator of a true slowdown, but insufficient supply. When homes come on the market, especially in areas like Seattle and Denver that have strong job growth and little unemployment, they are typically snapped up.
In other positive signs, home price growth remains strong in markets across the country—about 5 percent on a nationwide basis so far this year—and there are no signs of the credit excesses that characterized the housing crisis 10 years ago. “Lending standards today are still stringent, as evidenced by the higher-than-normal credit scores of those who are able to obtain a mortgage,” Yun says.
In short, Yun says, today’s housing problem stems from insufficient inventory. The supply problem is driving up home prices and worsening affordability and keeping sales from matching demand. That is a serious problem and the answer is to encourage builders to increase supply, Yun says, but it is not a prelude to a crash.
Selling or Buying your home is all about the details. Pay special attention to the simple steps above and always consult your realtor if you have any questions or need some guidance. When you work with a real estate professional Carriene Porter of Precision Realty & Associates, you’re guaranteed to get the expertise and advice you need to Buy your Dream home.
Source: 'No Housing Recession Over Horizon,' Forbes.com (Aug. 2, 2018)
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