Wednesday, October 24, 2018

Markets In Hot Cities Are Slowing, But Prices Expected To Rise In 2019

A recent report showed that some of the nation’s hottest housing markets are beginning to slow down. Slower home sales have been reported in housing markets like Denver, Oakland, Seattle and San Jose.  But despite this trend, the latest real estate forecasts suggest that home prices in most of these “cooling” markets will continue to climb in 2019. Full Article 

Hot Housing Markets Are Slowing Down

Is a cooling trend coming to the U.S. real estate market? In some cities and metro areas, the answer appears to be yes. In fact, cooling trends are being reported for some of the nation’s hottest housing markets, like Denver, San Jose and Seattle.

According to a recent report published by Redfin, a nationwide real estate brokerage, the markets with the fastest home sales during the spring of 2018 are now experiencing a significant slowdown.

The company based its analysis on the speed at which homes sell within a particular area. In some of the hottest and fastest-moving real estate markets (like Seattle and San Jose), the average number of days on market has dropped considerably. This suggests a softening of demand in those areas.

To quote the report:  “…this spring [2018] there were fourteen metro areas around the country where half or more of the homes that were listed for sale between March 5 and April 29 went under contract within two weeks. By mid-September, every single market saw its share of homes selling that quickly fall to below 50 percent, with spring’s fastest markets, namely Seattle and San Jose, California, seeing the largest declines, falling by more than 35 percentage points since spring and over 20 percentage points from a year earlier.”

Sellers Dropping Their Asking Prices

Price reductions are also becoming more common in the nation’s hottest housing markets, like Denver, Seattle and San Jose. Sellers in these and other areas are realizing there’s not the same level of demand as there was in 2016 or 2017. Homes are staying on the market longer.

Forecast: Home Prices Expected to Keep Rising

Despite the slowing sales cited above, hot housing markets like Seattle, San Jose and Denver still tend to favor sellers over buyers. Strong demand and limited inventory will keep these markets highly competitive for the foreseeable future.

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