Previous Month: July Home Sales Report
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While Americans’ housing confidence continues to soar to new heights, the lack of homes available continues to weigh down market activity. Zillow Chief Economist Svenja Gudell says, “Everyone has been talking about tight inventory, but I think we are okay calling it a straight-up inventory crisis at this point. We just don’t have enough homes.”
I think we are okay calling it a straight-up inventory crisis at this point. We just don’t have enough homes.
Millennials to the rescue?
While most housing observers look to homeowners in the Baby Boomer generation to relieve the inventory shortage, a recent Realtor.com survey shows that younger owners may be the ones actually ready to make a move.
Danielle Hale, Chief Economist for Realtor.com said, “The housing crash back in 2008 forced many first-time home buyers to consider smaller homes and condos as a way to literally get their foot in the door. Our survey data reveals that we may see more of these homes hitting the market in the next year.
A New Bubble?
When I’m out in the field, I hear a lot of concern from potential home buyers that rising prices means that we are heading into another housing bubble. In a recent Value Insured survey, an astounding 58% of homeowners said there will be a bubble and price correction within the next 2 years!
Rick Sharga, an expert at Ten-X disagrees. He writes:
We’re definitely not in a bubble…While prices nominally have surpassed the 2006 peak, we’re not talking about 2006 dollars. We’ve had 9 years of inflation to factor into home prices today…and, in fact, if you really dug into the analysis what you would find is that home prices today have basically recovered to about where they were in 2004.
But it’s not just Mr. Sharga. In the most recent Core Logic survey of 100 housing experts, not a single one is predicting a drop in national home prices over the next five years. In fact, they’re all calling for appreciation for each of the next five years. No one is looking for a market correction or a market crash.
Local August Home Sales
Let’s take a look at our local August Home Sales activity. The median sold price for detached homes and townhouses in Shepherd Park, Colonial Village, North Portal Estates and Takoma slid a bit to $699,900 in August. 22 total closed sales is more than double the amount from August 2016, so perhaps owners are finally getting the message and beginning to take advantage of their soaring equity.
At the same time, inventory remains dreadfully low:
In a normal market, we would have a six month supply of homes available. We are far below that.
Here is last month’s Fee Simple (No condos) Activity:
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Have a great month!