The rate of home price growth may be showing signs of slowing, and the competition for homes may be easing somewhat.
“The market’s topping out,” according to Mark Zandi, Chief Economist at Moody’s Analytics. It’s “starting to show cracks. It feels like we’ve hit the apex, and we’re moving to the other side of it.”
But that doesn’t mean the housing market is heading for a bubble. Real estate economists have long said the current frenzy in the housing market is not reminiscent of
the housing bubble nearly a decade ago.
Nationally, median home asking prices are more than 12% higher than they were after the first half of 2020.
Total national housing inventory is down 42% year over year as of June, 2021. There is still a severe shortage of homes for sale and some buyers are getting priced out of
Economists are generally predicting an overall slowdown in prices and more moderation. Many potential home buyers are still eager to purchase so they can take
advantage of low mortgage rates.
In Colorado, a strong month for new listings in June helped give potential homebuyers a little hope and opportunity. However, the volume of sales and homes going under
contract continued to grow as well.
Statewide, new listings in June rose 20% to just over 12,000 homes. Offsetting those new listings, June also delivered 10,256 homes statewide under contract. Further
diluting the gains in new inventory, another 9,857 single-family properties closed statewide according to the latest data from the Colorado Association of REALTORS® (CAR).
Across Colorado, average sale prices continue to set record highs that are as much as 50% higher compared to early summer of 2020, and inventory remains lower than a year ago at that time. However, there are some signs that suggest a slowing in some areas.
Colorado agents report a slowdown in showings, a reduced number of offers being submitted by buyers, and some price reductions showing up for homes that have not sold.
This is typical market activity for July and into August so the real question of whether the market is changing will be determined in the fall.
In spite of the signs suggesting a quieting of the market, prices are not expected to come down.
Danielle Hale, realtor.com®’s chief economist, believes, “Buyers aren’t going to get a deal, but they might be competing with fewer offers.”
For now, buyers have an opportunity to take advantage of some price reductions and a slower pace, and still get into the market.
When the time is right, let’s talk about how you can navigate the current market and make your next move!
Sources: magazine.realtor, realtor.com, coloradorealtors.com