Is the housing market slowing down in WV?
The operative word is slowing – not crashing. So if you buy a house now, will you still see an increase in it’s value?
One of the first things I noticed that made me think hmm – maybe a sign of a slow down – was an email I got from a builder offering a bonus at settlement to agents that bring a buyer to that subdivision. Builders usually don’t offer bonuses if they have plenty of buyers.
Predicting the future is a tricky thing because curve balls can come out of nowhere and throw the whole economy on a new path. The war in Ukraine, gas shortage, continuing inflation, rising interest rates.
Those developments are some of the reasons for the predictions of a housing showdown. And you see those predictions everywhere – on the news – online so that influences what everybody thinks is going to happen – consumer confidence – and that’s a big influence on what actually happens. People see those predictions and hold back.
I have noticed a slow down. As recently as last month (May) and the month before, the minute I’d put up a new listing I’d get a flurry of requests to tour the house. Just in the last two weeks, I’ve noticed a slow down of viewing requests. It hasn’t stopped – they they still come but not at the same rate. The results for June aren’t in yet – so we’ll see if there’s a change. I’ll do a video with those numbers.
I did find some data. According to Logan Motashami, in order for a housing slowdown to happen, the months of inventory need to go above 4 months with some duration. In May inventory levels were at 3 months – really low. We’ll see if there’s a change in that in June.
CoreLogic expects home price growth to go up 5% over the coming 12 months. That would mark a deceleration from the latest 12-month home price jump (19.8%). Moody Analytics expects growth to be flat. Realtor.com is saying there may be a price drop in major metro areas where prices got so high, few people could afford to buy a house and that is especially true with the rise in interest rates. Places like Los Angeles and Chicago. So in that case the cure for high prices is high prices. The price of homes in an area needs to be somewhat in line with incomes that can qualify to buy those homes.
No one is predicting a housing bubble that will pop and plummet prices. It’s more of a slow down in the feeding frenzy.
So if you buy a home today will the price go up in the coming months? According to what I’ve read, I wouldn’t count on prices going up too much in the short term.
But, unless you’re an investor, buying a home is more than a means to make a profit in the short term.
It is a hedge against inflation because a mortgage payment remains the same while rent goes up every year. So long term, home ownership is a very good idea. You are building up equity so that’s a built in savings account and we know notwithstanding a few ups and downs – home prices trend up, The only anolmaly was the 2007 housing crash which was caused by circumstances that were very different than they are today. The recessions prior to 2007 did not see a big drop in housing prices.
Those loose lending practices leading up to the housing crash with all the foreclosures are no longer in practice, so mortgage loans given today are to people that are qualified to pay that mortgage.
And final thought. And this is my take on things. I just don’t think we are going to see a big drop in prices unless some disaster happens. The rate of Price increases will probably slow down. There’s a big group of millennials wanting to become homeowners so there’s buyers out there and there’s not a bunch of risky loans with looming foreclosures. I think buying a home is still a good idea and the Eastern Panhandle is a good bet. We’re close to the DC area but lots less expensive with a more appealing lifestyle to lots of people wanting to get away from all the congestion. And with telecommuting now available, the Eastern Panhandle is more accessible to people working in the DC metro area.
