When will the housing market crash and it become a buyer's market? Hold that thought, experts warn.

Hi everybody, Joe Hillner with Your Home Sold Guaranteed Realty, where we will sell your home for just a 1% commission, guaranteed! 

Ok, so every week, I share market data to keep you informed with the local real estate market.  
Here is this week’s Boca Market Watch.

First, Single Family Homes:

50 new listings, pretty decent, and ranging in price from $425K to $14.6M.  
16 homes back on the market, while 8 homes listed took a price decrease, and 6 sellers raised their asking price.  And  another disappointing week with 35 different properties under contract, and 33 going pending.  Only 22 homes were unsuccessful in selling and were taken off the market or the listing expired outright.  And a poor week for sales with 45 homes closed in the past week,  ranging from $315K to $3.3M

Next up, Condos and Townhomes:

59 new listings, not bad, and ranging from $125 Grand to $1.8 Million.  
13 units came back on the market, 12 properties with a price decrease, and 7 sellers with an increase.  And a very good week with 68 different properties under contract, and another 52 going pending, including one of mine for 105% of asking price, the first day on the market!  And 26 condos or townhomes were unsuccessful in selling and were taken off the market or the listing expired. 62 closed sales this week, not great, and ranging in price from $71 Grand to $1.7 Million!
 

Here's what's making news right now.

For prospective home buyers who weren’t lucky enough to get into the game before the pandemic, the hope of a housing market crash may be the one thing to hold onto following month after month of rising prices and quick sales. Maybe prices will bottom out, suddenly making homeownership more affordable and attainable.

Generally low inventory leading buyers to settle on rushed decisions. Bidding wars helping push up record high housing costs. Numerous millenials in the country's biggest homebuying age are being priced out of markets across the country. Are these the indications of a housing bubble?

Emily Long, with LifeHacker.com, is reporting the following. 
 Unfortunately, it’s tough to predict what’s to come. Conditions today are completely different than they were prior to the 2007 housing crisis, so we can’t use that as a benchmark. In fact, many experts believe that we’ll be in a seller’s market for a while: housing supply is still extremely low, and even if price increases don’t stay in double digits, they’re also unlikely to reverse. Rising interest rates that make borrowing more expensive could cool things off a bit, but a crash is probably not on the horizon.

Even though we anticipate an increase in homes hitting the market early this year, due to the fact that there are the most homes under development since before the Great Recession, we still expect more purchasers to be priced out because of currently excessive prices and increasing mortgage rates.  Financial specialists told Inman News they don't predict a re-visitation of what has customarily been known as a buyer’s market any time soon.

Sellers stay in the driver’s seat, and business analysts told Inman the nation actually has a long way to go to settle  into possibly better approaches for contemplating about just what IS a typical housing market in the modern age.

What is a balanced market anymore?

The conventional view is that a market is in balance when there's a half year's stock of inventory in a given region, meaning it would take half a year to sell out of all currently accessible stock.

In my opinion, I just have a hard time imagining that we would ever get back to six months supply again any time soon.”

Can inventory catch up?

Emily says, “If you look at demographics, you can say that the current level of construction is pretty close to normal. “But what that doesn’t tell you is how far behind that total supply is.”

Home developers last year reached a level they hadn’t since 2006. Last month, one of every three homes on the market was a new-build, according to a study by online brokerage Redfin. 

However, the size of the backlog and the time it will take for those homes will take time to hit the market means many markets actually have quite far to go.

Rates are rising, so will buyers get the edge? 

10 years ago, if you were to tell a prospective buyer that the interest rate would hit 3.5 percent, they’d line up to lock in.

“Interest rates rising is going to probably pull some people on the margins away from buying at this time,” That might have some impact, especially in really expensive markets.

“Historically, interest rates were in double digits before and people still bought houses then,” she added. “Generational demographics are still going to be at play. Millennials are a huge generation and they’re still going to be trying to buy homes now and a few years from now.”

The takeaway? The increase in inventory that some forecasters predicted just hasn't happened yet.

“Acceleration of home price appreciation has gone up [and] inventory has continued to drop pretty drastically,” So it’s a lot tighter and more competitive at this point than ever.

Predicting an end to the ongoing seller’s market may be a lost cause.

The bottom line, for now?

“It’s still a seller’s market,” The public recognizes that and they're not letting it deter them. And in our market, the status quo is - Full Speed Ahead!