Over the last couple of weeks, a few interesting new perspectives have emerged on our housing market.
- Our seller’s market should last until (at least) 2020: This perspective comes from the recent Q3 Zillow Home Price Expectations Survey. In the survey, Zillow found that 76% of housing market experts expect our seller’s market will continue through at least 2020. While nearly half of these experts (43%) predicted 2020 would be the exact tipping point, a third of their surveyed experts predicted the turn wouldn’t occur until 2021, 2022, or some indeterminate year after then. Interestingly, only 12% of experts felt that we had already entered a buyer’s market, or would do so by the end of 2018.
- Don’t expect another housing crisis. Curbed recently published an in-depth piece on the causes of the 2008 housing crisis, and the substantial differences between the pre-2008 housing boom that contributed to the crisis, and the current booming market. In the piece, they note the primary difference between the 2008 market and today’s- in the 2008 market, loans were handed out en masse to fill excess inventory, while today’s lending rules are so strict they might be creating a price-hiking housing shortage. The article notes that these lending standards are potentially keeping many qualified buyers from entering the market (or forcing them to seek alternative lenders).
- Inventory remains low and out of balance. As recently noted by wtop, the D.C. real estate market currently has only 1.9 months of supply. (In other words, if no other units come on market, at today’s sales rates the current supply will only last about two months before the market is empty.) Generally, a market needs to have a six month supply of inventory to be considered “balanced”. The article also notes that listings in July remained on market for only 24 days while receiving multiple offers, and that homes are selling for 99.9% of their asking price, suggesting that buyers continue to respond to the last three plus years of constrained supply by purchasing whatever they can find.