The reports are in, and we seem to be transitioning out of the US housing boom. What are the indicators? Let’s take a closer look:
Before we discuss the statistics, you’ll need to understand the difference between a seller’s and a buyer’s market. A seller’s market features trends that favor the seller, including low inventory, high home values, quick sales, and a strong US economy. On the other hand, a buyer’s market is characterized by the opposite traits: high inventory, declining home values, longer wait times for homes on-market, and a declining US economy. Now that you have the basics down, let’s check out the results of recent analysis of the US real estate market.
Home Sales Have Dropped on A National Level
Fewer homes have been selling, which is a key indicator of a transitioning market. According to two different metrics taken by the US census, home sales have dropped. From August of 2018 to September of 2018, home sales fell 5.5%; on an annual basis, home sales dropped 13.2% compared to September 2017.
Inventory Has Increased
When the market starts to cool, one of the first indicators is an increase in inventory. In September, 2018, inventory was up 8% compared to September 2017. As a homeowner, you’ll experience a straightforward effect: A shift in supply and demand. As supply increases, demand for your particular home decreases, which negatively impacts the value of your home.
Homes Are on the Market Longer
A recent report released by the California Association of Realtors suggested that the time spent on-market for a home has bounced upward, meaning that homes are taking a longer time to sell. The increase in number of days spent on-market is not a good sign for a seller – the longer a home is on the market, the less likely the homeowner is to receive offers at the asking price. Generally speaking, if a home sits on the market for an extended period of time, the homeowner may have to consider selling for below value.
The Stock Market Has Taken a Hit
Many homeowners overlook the effect that the stock market has on the housing market. But for those looking to make the most for their home, awareness of the correlation between the two is nonnegotiable. Since President Donald Trump instituted tariffs on Chinese goods, the stock market has been wracked with instability. However, in the last week, the effect of the tariffs has been noticeable, creating a decline in the stock market. There are contradicting reports on how the future of these tariffs will impact the US economy – but if the market continues to decline, homeowners should be on alert that it may be time to sell.
What about Baytown?
The above is an assessment of the US economy as a whole. However, the question remains: does the Baytown market display the same trends?
In the last month, Baytown home values declined for the first time since September 2013. Although some reports indicate this is no cause for concern, and that the home values will continue to increase through 2019, this blip in the stats may indicate a major shift for the Baytown market.
The time spent on-market for homes in Baytown has continuously increased since July, 2018. Additionally, the average time spent on-market is almost 3x the length of the national average. An upwards shift is not a healthy indicator for the local economy.
On the other hand, however, Baytown has seen an annual increase in home values, which have risen 3.5% since September, 2017. What is this a result of? Most likely, homeowners are aware of the need to sell their homes at a competitive value while the market is still in their favor.
How Does This Affect You?
If you are considering selling your home, you may need to get started immediately. After analysis of the above factors, September may have been the most optimal time to sell, with opportunities continuing to decline. If the market continues to move in its current patterns, sellers will continue to lose money on sales.
To better understand how the market is impacting you personally, we recommend that you consult a real estate professional. We here at Gulf State Homebuyers have worked in the industry for years, experiencing the impacts of shifts in the market, ultimately allowing us to have an in-depth understanding of how these market trends can impact you personally. If you are interested in learning more about whether it is the time for you to sell, contact us today to get started with your free home evaluation.