Although these symptoms typically add up to an unhealthy market, this might be just what the doctor prescribed.
1. Rising Inventory
2. Increasing Interest Rates
3. Not so real estate friendly, new tax plan
Normally, I would say that this is where I say that we've found our pivot point and it is time to get away from real estate as quickly as possible. Before I make that argument, we need to understand what type of market this concoction is affecting. Market is as follows:
Low Purchase Price: +9.33%
High Purchase Price: +3.3%
Average Purchase Price: +9.24%
There are a large number of millennials who have not yet jumped in to the real estate game and are worried about their opportunity to do so given the aggressively rising prices, rising inventory and increasing interest rates. The expectation moving forward is to slow down the increasing prices, but that the rate of growth will be slowed.
Pricing has nearly doubled since the bottom of the recession and or we're at pre-recession highs (depending on specifics of your neighborhood). If the bottom of the recession was 2010/2011, it took us less than 10 years to do so. Chances that we will continue to have that rate of growth, especially with the new tax plan, are very low.
This sounds so doom and gloom, but it's really a great thing for making real estate more accessible to millennials looking to suburbanize and plant their roots. We're slowing down the squirreliness of the market and making it more accessible to more people: just what the doctor prescribed.