May 6, 2019
Many areas of the nation, including areas where Orion is licensed, have seen a lack of houses available for sale in certain price ranges. For extreme examples, trying to find a home for sale in San Francisco or Manhattan for less than $750,000. This lack of inventory impacts both real estate agents and lenders. And buyers and sellers. But our brokers report that change is afoot in various markets, and property listings have increased.
There are six markets leading the shift away from a seller’s market. Recent inventory increases and the slowdown in house price appreciation are not coincidences and may be the first signs of a weakening sellers’ market, which is good news for home buyers. The six markets, San Jose, San Diego, Pittsburg, Boston, Portland, and Seattle, are all seeing rising inventories that are bucking the national trend.
All 44 markets sampled in the previous report showed an increase in their real home prices. The number of active listings increased year over year in five of the six markets listed, granting buyers more options, which leads to less bidding wars and sellers reducing list prices. The dip in interest rates seen in December, and again about a month ago, should help other cities around the nation get in on the trend as home affordability increases. Orion’s clients are reporting similar things.
So will the rest of 2019 be different? Throughout 2018, consistent growth among mortgage rates, household income, and unadjusted house prices defined the housing market. So could home affordability really be improving? Or is this the beginning of a cooling housing market? The six cities may signal a broader shift in the housing market, as not only did affordability increase in these six markets, but monthly real house price appreciation slowed in the other 38 markets tracked. Recent inventory increases and the slowdown in house price appreciation are not coincidences.
House price trends is only one of the factors that Orion’s AEs watch on behalf of our clients. And we have plenty of programs for various types of housing markets – just ask us!