May 01, 2019
Here’s How the Housing Market Could Continue to Grow Sustainably
In a report by the National Association of Realtors, it was revealed that the prices of metropolitan houses for sale nationwide rose by four percent in the fourth financial quarter of 2018. (The median home was priced at $257,600, as compared to Q4 2017’s $247,800.) And while in Q3 the price of single-family homes rose by double digits in 18 of the 92 metropolitan areas where single-family home prices increased, Q4 saw this sort of rise in only 14 of these locales.
As we have discussed elsewhere, this was a marked slowing in the rate of increase of prices from the months and years directly preceding, which some have taken to mean that the housing market may be poised to recede. But, as this report details, meteoric rises in housing prices are not part of a sustainable trajectory. While nominally beneficial to sellers, including investors looking to sell, the higher that prices go, the further out of reach the average home becomes to the average buyer, which risks leaving an entire swath of potential buyers out of the housing market—particularly those looking to buy their first homes. Moreover, unabated fast-rate rise in prices can generally be taken to indicate a bubble in the making, which threatens to eventually leave people owning homes for which they owe considerably more than they can fetch at market (which is precisely what occurred in the wake of the crisis of 2008).
According to Lawrence Yun, the National Association of Realtors’ chief economist,
“Home prices continued to rise in the vast majority of markets but with inventory steadily increasing, home prices are, on average, rising at a slower and healthier pace.”
Rather than reason to worry, in other words, this slowing in increase of prices is the key to a robust-but-sustainable market—so long as the inventory of housing increases to match the demand for homes. And that appears to be the case here, as inventory of available homes for sale rose year-over-year from 1.46 million in Q4 2017 to 1.55 million in Q4 2018.
If you’re looking to take advantage of the present market inventory and the price stability it provides to buy that perfect home, we here at Topouzis & Associates, P.C. offer not only the services that ensure your title gets conveyed clear of defects, but Owner’s Policies of title insurance. Contact us if you want your property transfer in Cranston, Rhode Island; Springfield, Massachusetts; or Miami, Florida to go through without a hitch—both before and after closing.