Are we in a Buyer’s Market? Does the name Lawrence Yun mean anything to you? Probable not, unless you are a REALTOR®. He is the Chief Economist for the National Association of REALTORS®.
Mr. Yun’s job is to keep REALTORS® informed as to the direction of the market and tends affecting the real estate market.
Buyer’s are pulling back from the market and there are several reasons for that:
- Home prices have risen too high compared to income. Since 2011 house prices have risen 55% whereas income has only increased 18%.
- Interest rates are going up. That is affecting the size of house payments. In 2011 a typical mortgage payment was $639 compared to today’s payment of $1,136.
- Buyer’s Confidence Level is down. Only 38 percent of buyers think now is a good time to buy.
What’s the affect of all this on the real estate market? Less buyer’s means less demand. Consequently home price increases are slowing down.
These facts indicate that may soon be in a Buyer’s Market.
Yet, there’s plenty of good news for sellers:
- The economy is strong. In fact Yun says it’s “roaring.”
- Unemployment is at historic lows. Almost everyone who wants a job has a job.
- Mortgage rates going up do not necessarily mean that home sales will go down. History proves this point.
- 50 percent of people think now is a good time to sell. And, those sellers become buyers.
Keep in mind, real estate moves in cycles. Today we are still in a Seller’s market. What comes next? A Buyer’s Market. That’s always the case. Like all markets.
Look at the chart below. Where are we in this cycle?
From what I’m seeing our Austin, Texas market is shifting. I’ve been saying this for a while now and every month the facts support my conclusion.
Stick with me. I won’t hide the truth. I will keep you informed to help you make the best buying or selling decision you can.
