February 19, 2019
What is Likely to Drive a Positive Correction in the Market in 2019
A certain softness appeared in the housing market during the latter portion of 2018, and chances are that it will stick around for a bit. While for a few years there the market was hot and listing prices were on the rise, a confluence of effects—particularly buyers’ fatigue and rising interest rates—has led to the cooling milieu that most of us are becoming familiar with.
That said, this new scenario should properly be looked at as a correction. It is often in the nature of these corrections to see a market swing, pendulum fashion, first too far in one direction, and then in the other, before settling into a more even and balanced state of equilibrium. That’s where we appear to be headed.
For one thing, the high and rising prices of listings have been doing a lot to prevent the Millennial generation from entering the housing market at the same stage in life as their parents and grandparents did before them. The correction may not be the best news for investors and those looking only to sell, but for many people out there looking to get into a starter home, and whose wages have finally begun to rise, a less heated market may offer the opportunity to at last live this keystone portion of the American dream.
Meanwhile, we feel compelled to point out that we have seen high mortgage rates in the marketplace before—much higher than they stand at present, in fact—and enjoyed robust home sales at the same time. The fact is, people just need some time to acclimate to higher mortgage rates. Yes, these higher rates will keep some owners from trading up for a span. But such rates will also become the new normal before too long, and, as reasonable listing prices also become the norm, we can likely expect to see housing bounce back modestly from its current woes over the course of 2019.
We here at Topouzis & Associates, P.C. do everything we can to be absolutely sure our clients are conveying and purchasing title clear of judgments and defects. 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.