In some high-demand regions, Keith Flenniken noticed that housing prices were rising so dramatically that there was sure to be a decline in sales. However, these price increases caused certain housing markets to experience a temporary slowdown, causing the trend to be deeper and more widespread than expected. According to a recent report, monthly home sales dropped a full 13.3% year over year. A report from the National Association of Realtors also mentioned that last month, the sales of new single-family homes hit their lowest point since July of 2013. In addition to a slowdown in overall home sales, the average sales price for purchased homes was exceptionally high. Median sales prices were the highest yet recorded, resting at an average of $290,000.
This difficult combination makes it a tough buyer’s market, especially for first time buyers. Since the overall sustainability of the housing market relies heavily on first time buyers, the market risks stagnation.
Fortunately, low-priced houses still seem to be moving. The same article noted that only 49% of the homes on the low end of the market were on sale two months prior, in comparison to 53% of mid-range homes and 62% of homes in the highest price tier. Data also suggests that the unhealthy market is regionally segmented. Although this is common, it seems especially pronounced. In the Northeast, sales of single family homes are the strongest, while sales are lagging more so in the South, West Coast, and Midwest.
Some blame the sluggish housing market on the prolonged winter, but Keith Flenniken and other real estate investors have high hopes that the downturn will be only temporary. The market will eventually stabilize, and even though all real estate is local, it is likely that every region will see the dip that some are currently in.
Read more about the U.S. housing market here: