What to expect in the future real estate market

I’m sure you’ve seen them and possibly read them; the headlines are all over the place with stats and predictions of what’s happening in the real estate market. Some of the statistics and headlines have some truth to them, and some are just bold sentences handpicked out of context to grab your attention and add some anxiety to your life. Is the market changing? Yes, the real estate market is always changing, but is there reason to panic? No, we are not going into a 2008 type of situation all over again where we’re headed for a crash.

The headlines you may be seeing, or tidbits of information you’re hearing, can be a cause for alarm if you don’t know the whole story and the details behind the headline. Yes, in May alone there were 131 price changes to properties actively on the market, which is more than we’ve seen in a month for over two years; that’s a 44% increase. However, there is a logical reason for this, and I’ll explain. For over 10 years we have been in a “sellers’ market” and sellers have named their price and terms, and buyers have been happy to pay them. Remember the saying, if you price your home right it will sell? Well that’s never going to change. Demand is still high, and inventory is still very low, but buyers are savvy and know when they see a good value and when a home is priced too high. So, if you’re a seller, a good agent shouldn’t agree to let you price your home at the inflated price it may sell for because that’s going to drive buyers away, but by pricing it just under the current market value, you will draw the best offers.

Don’t be fooled; the demand is still there. New construction stats are still lower than they’ve been for 14 years. Which leads to another headline you may have seen…inventory is up 30%. Wow, that seems like great news, right? Yes, it has helped a little, but statistically, even though it’s up this year, it is still only at a fraction of what it was six years ago. This “sellers” market that we’ve been in for a decade isn’t going away anytime soon. As the market shifts and adjusts, though, several things will play out. Home prices are expected to continue to rise into 2026 but at a much slower pace, more like 4-6% instead of the 11-14% rate they’ve been increasing. Interest rates have forced some buyers out of the market, but that will only decrease the demand by a very small fraction. Historically when rates increase quickly as they just did, the demand and prices increase too but only for a short time while buyers jockey to buy quickly before another rate increase. Ultimately though, a slightly softened demand will be part of the market adjustment, and we will start to see the process become more normal.

The best outcome we can expect is for the more traditional process of buying and selling to come back around. Major contingencies that every buyer should be entitled to will become the norm again, and this should be a welcome change for everyone! For graphs or any details, feel free to email or call me, [email protected] 508 826-7661.