In other words, the market is shifting somewhat to favor buyers a little more, but no one is talking about a market collapse right now.
Fannie Mae spoke to us in May when it reported a third consecutive month of record-low homebuyer sentiment, divulging in its latest National Housing Survey that fewer than one in five Americans think now is a good time to buy a home. A disheartening 17% of the 1,000 Americans polled by Fannie Mae last month believed it was a good time to buy. Times, they are a-changing.
Although homebuyer sentiment is down, there may be hope on the horizon, given the effort by the feds to hike interest rates and curb inflation.
Although the prospects of a housing bubble have been widely dismissed, a consensus has begun to form in which a mild recession later this year or in 2023 may bolster housing.
Among 114 experts polled earlier this month at Zillow, three out of four expect the economy to contract for multiple quarters as the Federal Reserve takes bigger steps to curb inflation.
While it’s unclear how a recession would affect the real estate industry, at least a few have suggested that, historically, such a turn would be less damaging to housing than the economy at large.
“Although the Great Recession was triggered by a housing crash, it’s an outlier in the grand history of recessions, which have often strengthened investment in housing due to its relative stability as an asset,” said Zillow economist Nicole Bachaud in Zillow’s report on the survey.
Meanwhile, although home prices are still rising, sellers are losing some of their advantage and, in some cases, are reducing their asking prices. That doesn’t mean prices are dropping, but it does suggest price growth will slow down and a more balanced market may return. What’s more, incentives and concessions are appearing like a sudden cloudburst, giving homebuyers the occasional upper-hand in some markets.
In other words, the market is shifting somewhat to favor buyers a little more, but no one is talking about a market collapse right now. Despite the downward pressure on housing prices because of higher interest rates, the fact remains that we simply have not built enough homes fast enough in the last decade to serve the needs of the nation – and that problem won’t likely vanish anytime soon. QCBN
By Nick Malouff
Nick Malouff is the CEO and co-owner of Better Homes and Gardens Real Estate BloomTree Realty ,with offices in Prescott, Prescott Valley, Cottonwood and Sedona. To reach Nick or a highly qualified agent, please call 928-443-8800.
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