Of course, we don’t have a crystal ball; the following is just our opinion based on what we’ve seen in the history of the housing market and what we’re experiencing in the real estate trenches on a day-to-day basis.
2019 was an up-and-down market year—definitely not as feverish of a market as 2017 and 2018. We saw a slow down of activity as days on market (i.e., the time it takes for a home to actually go under contract) crept up slightly. In general, there were some signs of buyer fatigue. It seems buyers just weren’t as quick to pull the trigger on homes.
We’ve had many conversations about why this is, and really there’s no easy answer as to why buyers were more hesitant. Since the housing market crash 10 years ago, we’ve seen prices go up as inventory continues to dwindle and demand increases.
The average sale cycle for real estate is sevens years, so this seller’s market is a little overextended. Perhaps the higher home prices that come with a seller’s market have simply reached a point that deters a lot of would-be buyers.
The Fed stepped in to help with this by lowering the interest rates. Right now, those rates are still incredibly attractive, but this action hasn’t necessarily spurred buyer activity as much as some might’ve thought it would.
2020 is an election year, so what does that mean? As the general election wraps up, there’s a decent chance the Fed will push up on interest rates, but overall the election will have a minimal impact on the market.
It’s helpful to remember that the real estate market is like a slow-moving ship; it often takes several quarters in a row for changes to take effect. That’s why it’s important to always be watching for real estate trends as they slowly appear so you can stay ahead of the curve and position yourself for any turns, should they seem likely.
If you have any questions about what last year’s figures mean or where 2020 might lead, feel free to reach out to us by phone or email. We’re always happy to hear from you and offer our assistance.