As in previous years, the fourth and final quarter was largely a continuation of the market behavior seen in Q3, with inventory levels slightly outpacing demand and a balancing of the median sales price that peaked in the middle of the quarter before tapering down. In this quarterly report, we’re taking a look at the three driving factors of the housing market – supply, cost and demand – and how this amalgamation of data ultimately dictates overall performance.
From what that tri-county numbers show, it’s easy to see why national headlines are reporting a slowing of the market. This slowing, however, doesn’t necessarily indicate a downward trend, but rather a balancing and normalizing following the boom of activity seen throughout the last five years. Drayton Saunders, President of Michael Saunders & Company, discusses this and other notable factors seen between October and December; in addition to what we can expect moving into 2019.
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- Inventory levels are slowly rebounding creating a neutral market and more choice for buyers
- Mortgage rates have decreased since the first half of the year
- Market demand is equalizing after five years of exceptional growth
As demonstrated by the graph below, sellers came into 2018 with decidedly less choice. As the year went on, our markets were recovering their inventory. Despite large strides made with new construction each month, it wasn’t until demand began to slow in Q3 that we saw the numbers veer into the positive. As Drayton mentions, a large portion of the home search equation is finding something that establishes an emotional connection, and if you can’t find what you want, you don’t buy what you want – or don’t buy at all.
Lower Mortgage Rates
Another part of homeownership, especially for those considering entering the market for the first time, comes down to cost. While interest rates continue to be at historic lows, buyers in 2018 saw the gradual climb in rates throughout the first half of the year and likely activated – fearing a higher rate would impact their ability to buy later on – or postponed buying altogether. The latter half of the year, however, saw the opposite effect. The Wall Street Journal explains the relationship between the Federal Reserve and its investors in the informative video below about The Yield Curve. For more information on current rates and how they impact your real estate journey, we recommend reaching out to one of the professionals as MSC Mortgage.
Healthy Demand into 2019
Looking ahead to 2019, all signs indicate an equalizing and healthier market overall. While we got here due to a “slowing” of pace, the demand to live on the West Coast of Florida remains strong, with more choosing the state year after year as their primary or secondary home. Look no further than the news of Lakewood Ranch’s exceptional growth into Sarasota County with the Waterside community, the increased activity at Punta Gorda Airport with Allegiant Airlines, and the renaissance of downtown Bradenton for good omens at the start of the year. Many economists have noted that 2019 will be a pivotal year across the nation for the real estate market. At Michael Saunders & Company we always recommend reaching out to one of our highly-skilled agents to get a clear picture of how those trends impact you on a local level.
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