- Hi, I'm Trae with the Dauby team
of Keller Williams Capital Realty.
Today I just wanna take a quick minute
to talk about where the real estate market is headed.
(serene music)
So when preparing to figure out where the market
is headed, we're always looking
at trends here locally and nationally.
There were a few key things that really stuck out to me.
In 2005, 2006, when the market was really hopping
throughout the nation and here
in Southwest Indiana, home sales
in Southwest Indiana was right around 4,800 homes sold.
That's across eight counties
that I'm considering Southwest Indiana.
In 2009 it dropped drastically to under 3,900 homes sold,
so we had 900 less homes in 2009.
So where have we been trending as of late?
In 2016 there was 5,068 homes sold in the same area,
and in 2017, we've ticked down just a tad bit, to 5,034.
Now sales have been down a little bit throughout 2018.
Based on the last two years of where sales were
at this point of the year versus where they are now,
it's looking like home sales this year
are gonna be around 4,900 home sales.
So we are starting to see it tick down a little bit.
You can take a look at the graph
that we have here in the video
that kinda shows the historical trend
of home sales here in Southwest Indiana
in the last 20 years.
You can take a look at it, and if it does trend down
to the 4,900, it looks like we are starting
to see a little bit of a downward trend in the home sales.
The next thing I took a look at was supply of homes.
For the last two years,
we've had a real shortage of homes
for sale here in Southwest Indiana.
That does continue to be the case.
However, we are starting to tick up a little bit.
Nationally, in August, it was the first time annually
that the supply of homes have actually increased
in the last three years,
according to the recent statistic from
the National Association of Realtors.
The other item I looked at when looking
at the national trends was Southern California.
Southern California, historically, has always set
the trend for where the real estate market
was headed for the rest of the United States.
It was always a leading indicator
of where the market was headed.
Home sales in California has drastically dropped.
In fact, home sales in June was the lowest
it had been in the last three years.
It appears that the market is starting
to cool off, so what's causing this?
There's a couple things that is causing the market
to cool off, but the main thing is affordability.
Interest rates are starting to rise.
Interest rates, actually, as of right now,
are right about 5% on a 30 year note.
Last year, in 2017, it was just over 4%,
and in 2016, it was right around 3.6%.
The interest rate has risen about
a point and a half in the last two years.
In fact, we have not been above 5% since 2009.
The other thing is the purchase price of the home.
Since there has been low inventory,
homes have been appreciating at a quick pace.
The median home for sale right now
is actually 20% higher than what it was three years ago.
So the combination of the higher price,
plus the higher interest rate has started
to push back on affordability a little bit,
and starting to push some buyers out of the market.
So what does this mean for you?
If you're a buyer, this is probably some welcoming news.
If you've been inside a home lately,
and you like it, you probably realized
that you had to make an offer immediately
without having any time to think about it.
Once you did make the offer, there may
be multiple offer situations.
We've already started to see where
the multiple offer situations have started to calm down.
We're not seeing near the amount that we once were.
So this is some welcoming news if you're a buyer.
If you're a seller, don't panic.
It appears that this is just a cooling down of the market.
There's not substandard lending going on,
like there was back in the mid-2000's
that really pushed the financial market
and created a ton foreclosures,
which ultimately dropped values.
It is just more of a cooling off of the market.
However, if you are looking to make a move,
I would do it sooner rather than later.
Also, it's gonna be ultra important
that you interview a realtor
and find somebody like our team
that has the marketing resources
to get your home sold quickly and for top dollar,
because as it becomes a little bit more difficult
to sell your house, that experience,
the proving marketing strategies,
are gonna be very important to get your home sold.
But if you wanna know more about your specific situation,
always feel free to reach out to us.
You can reach us at 812-777-4611.
Again, I'm Trae with the Dauby team
at Keller Williams Capital Realty.
Have a great day!
(serene music)
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