Wednesday, January 2, 2019 / by Bernie Christian
This is my first blog post for the new year. As soon as we finished out December home sales in Tarrant County, I wanted to see what the actual market statistics would say in terms of the month's supply of inventory. Many people are familiar with supply and demand in terms of economics. Others not so much! If supply goes up demand goes down and if supply goes down, demand goes up. When applied to real estate, we think in terms of a buyer's market, a neutral market (favors neither buyer or seller) or a seller's market. When real estate inventories are less than 3 month's supply, as it is for Tarrant county in the graph below, we say that it is a seller's market. 3 - 6 month's supply would be a neutral market and above 6 month's supply would be a buyer's market.
Because I analyse the market almost daily, I could see back a few months ago that the last quarter of the 2018 was heading toward a neutral market and we were also seeing evidence that there were lots of price reductions to many of the homes active for sale on the market. Also, we were seeing fewer and fewer multiple offer scenarios on our listing inventory. These 2 factors lead me and others to believe that this is an indication of a shifting market. Well, I still believe that we are in a shifting market (from a seller's market into a neutral one). However, by the end of the 2018, Tarrant County housing market never quite reached the point where it went into neutral territory leaving home sellers on some solid footing.
As long as the economy stays strong and people keep moving here in record numbers, home prices in Tarrant County should remain relatively strong but with a slow but continued trend toward a neutral market. Why, because I don't believe our housing prices can continue on the track that they've been on for the last few years due to the fact that statistics show that the national housing market will shift every 7 years and we are over due for another shift. The last major shift with a large correction was back in 2007 where housing prices fell dramatically. Prices must eventually shift back down or correct to track with the historical trend. How quickly or dramatically that will happen this time around is unknown and would depend mostly on other factors such as the national and local economy, unemployement, the GDP, etc.
Many buyer's are waiting to buy because they want to see if market pricing improves for buyers and because interest rates are on the rise. These are the reasons that there is some pressure for the market to shift.
My advice for buyers is ... don't wait to buy a home because you're gambling by waiting. On the other hand, since nobody, including myself can accurately predict with a high degree of certainty what the future of the market will be, never buy a home unless you plan on staying in that home for at least 5 to 7 years. That way, if you did buy now and the market went down in value, no worries because you'll live there long enough for the market to correct upward again in your favor and before you decide to sell your home. And, if the real estate market is down when you want to sell, you can always rent your property until there is a more favorable sales environment. You can never remove all the risk when making an investment or a major purchase but we do know that the value of real estate moves up over time and it is one of the safer investments that you can also live in. But one thing will always be true, and that is, you have to invest in real estate if you expect to make money from it.
Give me call, I consult with both buyers and sellers all over Fort Worth and surrounding counties at no cost to them. We can drill down into the numbers for your particular neighborhood and price band for what you want to buy or to sell. You need a real estate expert to help you with these decisions to either buy or sell and I have experience with both. We also work with investors that are looking for great deals.
Also, use our free MLS Home Search to find everything for sale in the MLS.
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