Housing Market Forecast to Shift to Favor Buyers by 2019
There’s no doubt that the housing market currently favors sellers , with low inventory driving competition, and pushing prices higher and higher throughout much of the country. But a survey of industry experts released by Zillow predicts that the market will change by 2019 to favor by buyers.
More than 100 housing experts participated in the Zillow Home Price Expectations Survey, with the majority indicating that they believe the housing market will shift from a seller’s market to a buyer’s market some time in 2018 or 2019.
Home Prices Expected to Begin Leveling Off Next Fall
Home prices, which have been on the rise for 4 years now, are expected to slow to 3% appreciation by October of 2018, according to Zillow, which will be a sure sign that the market is shifting.
“The housing market has been favoring sellers for the past few years,” said Zillow Chief Economist Dr. Svenja Gudell in a press release. “Sellers in the current housing landscape often have the luxury of listing their home ‘as-is’ without fixing it up or with only minimal window-dressing since demand for homes has been high and inventory low.”
“It’s common for sellers to receive multiple bids, and in the hottest markets, sell for over asking price, but these conditions will change in the future,” she said. “As the number of homes for sale increases and home value appreciation slows, we expect the market to meaningfully swing in favor of buyers within the next two to three years.
Not Everyone Believes Prices Will Drop So Soon
While Zillow’s survey indicates that home prices will start to level off, another recent report actually predicts that home prices will remain high throughout much of the country for the next two years.
The Fall 2017 edition of The Housing and Mortgage Review® released by Arch Mortgage Insurance Company indicates that there’s little chance of a housing bubble, with data showing the chance of home prices dropping over the next 2 years in the nation’s 401 largest cities averaging only 4%.
However, the report did indicate that the chances of prices dropping in some states was much higher than this average. Alaska topped the list with a 39% likelihood of home price declines in the next two years; followed by North Dakota with a 33% chance; Wyoming, 31%; West Virginia, 26%; Oklahoma, 16%; Louisiana, 15%; New Mexico, 11%; and Mississippi, 10%.
The risk for price reductions in the top 50 metros by population was about 33% over the next 2 years. The two metros with the highest risk at 35% were Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla., and Nashville-Davidson-Murfreesboro-Franklin, Tenn.
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