The economic and housing market conditions are showing signs of weakness, and here in the Atlanta area we may begin to see a shift in the real estate industry in home sales.
When you view our “Market Trends” link above, and study it as we do quarterly, you’ll see five indicators of a downturn of some sort. Days on the market are up, the supply of move-up and higher end housing is now growing, home prices are going down in some markets, unit sales are slowing and construction is flat.
Only four times in U.S. history have home sales been higher, this is a sign of a shift in the real estate market.
The median home price is higher that it has ever been in the history of recorded time — last time we were here we were on the verge of a recession.
“It wouldn’t take much right now to push us into a buyer’s market.”
We want you to be aware of these trends, there can be long-term implications. We lost home builders in the last downturn that we never got back.
And in the meantime, nationally, home sales are on pace for another post-crisis record; sales are slowing in some markets as affordability becomes a serious issue.
We are now seeing many markets split by price point. Entry-level homes remain in a seller’s market, but some luxury and move-up markets show signs of shifting.
The macroeconomic picture is not helping. Economic growth has been held back by low levels of investment in 2016, even though consumer spending remains strong. Low interest rates and an improved employment picture are the good news.
But affordability has been declining since January as prices continue to outpace wage growth, hurting home sales. Construction has been focused on the high-end market, which is now showing signs of stress as high net worth buyers sit on the sidelines due to political and economic uncertainty here and abroad.
All this is a clear reminder that Real Estate is cyclical. Here in the Atlanta area we have been blessed with a healthy up cycle after a nationwide real estate crash. July housing numbers are showing signs of a “shift” in the markets.
As leaders in our community and veterans in the real estate industry we know there are always ups and downs in the real estate market, and for home buyers and home sellers, our promise is to stay focused, innovative and double down on prescribed activities to help you navigate any trouble waters that may lie ahead.
Chris and Roxanne Ferguson