Lawrence Yung, Chief Economist for the National Association of Realtors, speaks about the most recent July, 2016 housing market performance. The key takeaway’s are:
- Overall market size continues to shrink due to continued supply problems.
- Prices continue to rise because of fewer homes coming on the market.
- Builder contracts are up but new construction is only 10% of the total market.
- New construction is critical to inventory because most buyers are previous homeowners.
- Overall key box openings were down meaning less foot traffic.
Overall the market is leaning towards softening due to the unavoidable squeezing of first time, and other homebuyers out of the housing market due to escalating prices.
To me the question is ” Is this going to be a hard landing or soft landing? “. I think it all depends on inflation and interest rates. Should the federal reserve began to dramatically increase interest rates housing prices will begin to fall.
Another interesting point, I did not realize until now that NAR tracks lock box openings. The only way to get that data would be from the GE Supra System. I would like to see that data on a local level in real-time to inform clients of actual market activity. That would be so cool.