Change in US housing sectors will see move to a buyer’s market by 2018
The residential property market in the United States is set to move from a seller’s market to a buyer’s market in the coming 18 months, according to new research.
Property prices increased by over 6% in the 12 months to October 2016 but the outlook for next year suggests growth will fall to 3% by the same month in 2017, according to the latest analysis from real estate firm Zillow.
Despite unfriendly market conditions for buyers, housing experts predict things will change in the near future with the majority of experts surveyed in the latest Zillow home price expectations survey forecasting change by 2018 or 2019.
‘The housing market has been favouring sellers for the past few years. 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,’ said Zillow chief economist Svenja Gudell.
‘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. As the number of homes for sale increases and home value appreciation slows, we expect the market to meaningfully swing in favour of buyers within the next two to three years,’ she explained.
She also pointed out that due to lack of stock prospective buyers often face intense competition. Less than half of buyers are successful in purchasing the first home they make an offer on.
The latest Zillow data also shows that Portland, Dallas and Seattle reported the highest year on year home value appreciation among the 35 largest metros across the country for the third month in a row.
Home values in Portland rose almost 15% to a median value pf $349,500 while property prices in Dallas and Seattle have appreciated just over 12% since October 2015.
The data reveals that there are 6% fewer homes for sale across the country than a year ago, with Boston, Indianapolis and Kansas City reporting the greatest drop in inventory among the 35 largest metros. In Boston there are 26% fewer homes on the market and 24% fewer in Indianapolis.
Rents across the nation are also up, recording growth of 1.4% to a median rent payment of $1,402 per month. Seattle, Portland and Sacramento reported the highest year on year rent appreciation among the 35 largest US housing markets.
The Zillow rent index shows that rents in Seattle increased by 9% to $2,087 while rents in Portland and Sacramento were up 7% and 6% respectively.