Market Update | July of 2018
Housing price bubble chatter has increased this summer, as market observers attempt to predict the next residential real estate shift. It is too early to predict a change from higher prices and lower inventory, but the common markers that caused the last housing cooldown are present. Wages are up but not at the same pace as home prices, leading to the kind of affordability concerns that can cause fewer sales at lower prices. At the same time, demand is still outpacing what is available for sale in many markets.
New Listings increased 4.1 percent for Single Family homes and 2.0 percent for Townhouse/Condo homes. Pending Sales decreased 18.8 percent for Single Family homes and 18.9 percent for Townhouse/Condo homes. Inventory decreased 3.3 percent for Single Family homes and 1.8 percent for Townhouse/Condo homes. Median Sales Price increased 7.7 percent to $374,950 for Single Family homes but decreased 1.4 percent to $177,500 for Townhouse/Condo homes. Median Time to Contract increased 22.2 percent for Single Family homes and 8.3 percent for Townhouse/Condo homes. Months Supply of Inventory increased 4.1 percent for Single Family homes and 2.1 percent for Townhouse/Condo homes.
Consumer spending on home goods and renovations are up, and more people are entering the workforce. Employed people spending money is good for the housing market. Meanwhile, GDP growth was 4.1% in the second quarter, the strongest showing since 2014. Housing starts are down, but that is more reflective of low supply than anything else. With a growing economy, solid lending practices and the potential for improved inventory from new listing and building activity, market balance is more likely than a bubble.
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