April 22, 2019
Will 2019 Be a Buyers’ Market?
It’s nearly always difficult to perfectly imagine the direction in which a market might be headed. We have benchmarks, trends, gauges of investor and consumer confidence … all of which paint their pictures, and which can be combined to create an even grander sense of what may be to come, but what none of them contain is the actual events of the future, with its tendency to upend expectations that have been built on experiences of the past. That said, market watchers would be remiss in failing to make educated guesses about where things may go in the year to come. For determining whether the market will remain a sellers’ market or crest the peak and fall into a buyers’ market, we look at where prices appear to be headed, where mortgage rates seem to be trending. And, more importantly, how these tendencies have interacted in the market in previous cycles.
As the price increase has apparently begun to slow, the mortgage rates have simultaneously gone up. It’s hard to say whether the latter is a cause of the former, but what does tend to happen in the market is that as mortgage rates go up, the affordability of higher-cost housing moves out of the range of many buyers who might have been able to afford a monthly payment at a lower rate. When the market begins to take this into account—when we see the sort of buyers’ fatigue that many market watchers are claiming has settled in, where buyers stop competing for homes—sellers begin to react by posting houses for lower prices. And this is precisely what many in the industry are predicting for 2019, especially if we keep seeing softness in the stock market as well: for home prices to move from slowing in their increase to potentially beginning to go down as competition diminishes, leading to fewer bidding wars and perhaps even situations in which buyers will be able to negotiate prices downward due to lack of demand. That’s the very definition of a buyers’ market.
Our team here at Topouzis & Associates, P.C. does everything we can to be absolutely sure our clients are conveying and purchasing title clear of judgments and defects—whether the home is purchased in a sellers’ market or in a market favoring buyers. And, yes, we help our clients put into place a good policy of title insurance to make certain they don’t get surprised by any nasty lurking issues with a property. Contact us if you’d like us to do this for you.