To get a proper perspective on the current housing market, it can’t hurt to listen to what the experts are saying.
So, Here is a round up of quotes from various experts regarding the current real estate market.
Consumer confidence overall, and especially in the housing market, are the strongest they have been:
From a recent HousingWire article, “Consumers Have Never Felt Better About Housing Than They Do Right Now”
“Consumers’ faith in the housing market is stronger than it’s ever been before, according to a newly released survey from Fannie Mae. (The) Fannie Mae survey shows consumer confidence reaches all-time high.”
“According to the Fannie Mae report, the Home Purchase Sentiment Index increased by 5.6 percentage points in February to 88.3, setting a new all-time high.
That’s also up 5.6 percentage points from the same time period last year.
Overall, five of the six components that make up the HPSI were up, with three hitting record highs.”
The Fannie Mae report referenced is The Fannie Mae Economic & Strategic Research (ESR) Group’s May 2017 Economic and Housing Outlook.
“The latest post-election surge in optimism puts the HPSI at its highest level since its starting point in 2011. Millennials showed especially strong increases in job confidence and income gains, a necessary precursor for increased housing demand from first-time homebuyers,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.
“Preliminary research results from our team find that millennials are accelerating the rate at which they move out of their parents’ homes and form new households,” Duncan continued.
“However, continued slow supply growth implies continued strong price appreciation and affordability constraints facing millennials and first-time buyers in many markets.”
More from Doug Duncan, Fannie Mae Chief Economist:
“Positive demographic factors should continue to reshape the housing market, as rising employment and incomes appear to be positively influencing millennial homeownership rates.”
A recent Bloomberg.com article, “U.S. Consumer Comfort Just Reached Its Highest Level in a Decade”:
“Americans’ confidence continued to mount last week as the Bloomberg Consumer Comfort Index reached the highest point in a decade on more-upbeat assessments about the economy and buying climate”
According to Yahoo Finance, Consumer confidence is at a 13-year high in America:
“Confidence continues to rise among America’s consumers…the latest consumer sentiment numbers from the University of Michigan showed that in March confidence rose again.”
MarketWatch echoes that report:
“U.S. consumers are the most confident in the U.S. economy in 15 years, buoyed by the strongest job market since before the Great Recession.
The survey of consumer confidence rose…according to the Conference Board, the private company that publishes the index. That’s the highest level since July 2001.”
Ivy Zelman, in her recent Z Report, probably best capsulized the reports:
“The results were incredibly strong and…offer one of the most positive consumer takes on housing since the recovery started.”
Low Inventory Makes This Housing Market A Unique Seller’s Market
From a recent article by Diana Olnick of CNBC, “Spring Housing: Strongest Seller’s Market Ever”:
“Even as more homes come on the market for this traditionally popular sales season, they’re flying off fast, with bidding wars par for the course. Home prices have now surpassed their last peak, and at the entry level, where demand is highest, sellers are firmly in the driver’s seat.”
“I’ve been selling real estate for 25 years and this is the strongest seller’s market I have ever seen in my entire real estate career,” said David Fogg, a real estate agent with Keller Williams in Burbank, California.
From the CNN Money article “Life Is Good For U.S. Home Sellers“
“It’s good to be a home seller right now … really good. That’s because it’s the most profitable time to sell a home in almost 10 years. Homeowners who sold in the first three months of this year saw an average price gain of $44,000 from purchase, according to a report from Attom Data Solutions released Thursday. That’s the highest gain since 2007.”
“I am guessing we will see it get even better… If you are considering moving, it could be a really good time to sell.”
Despite Inventory Issues, Housing Market Still Performing Well
From The National Association of Realtors (NAR), the quarterly Metropolitan Median Area Prices and Affordability report:
“The strongest quarterly sales pace in exactly a decade put significant downward pressure on inventory levels and caused price growth to further accelerate during the first three months of 2017, according to the latest quarterly report by the National Association of Realtors®. Metro home prices have now accelerated for three consecutive quarters.”
“The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month.
Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings…for sales to muster a strong gain. Sales will go up as long as inventory does.”
From a recent HousingWire.com article: “First American: Housing Market Barely Underperforms Full Potential”:
Despite the headline, the housing market is still “Performing 47% better than last year”.
“Despite higher mortgage rates, the potential for home sales increased on an annual basis driven by steady income and job growth, along with a surge in building permits.
While it may be a little late for this spring, the increase in building permits is a welcome sign that some relief may be in sight for the inventory shortages that are holding back many markets from realizing their full potential this spring.”
But Is A Housing Bubble Forming?
Warren Buffet addressed this issue in an article by Fortune Magazine. He simply explained:
“I don’t see a nationwide bubble in real estate right now at all.”
When questioned whether real estate and/or mortgaging could present the same challenges for the economy as they did in 2008, Buffet said:
“I don’t think we will have a repeat of that.”
Outlook Is Good
From the most recent quarterly Zillow Q2 2017 Home Price Expectations Survey:
“Expectations for overall home price growth are stronger now than they were a year ago. A year ago, panelists predicted that home prices would rise 3.4 percent in 2017.
Now, they expect to see a 4.8 percent increase. Their forecasts for home price growth in 2018 are also more optimistic now compared to last year.”
“On the heels of last year’s nearly seven percent national home value appreciation rate, the prospect that prices will increase less than five percent overall this year might be dispiriting to some,” said Pulsenomics founder Terry Loebs.
“Yet, 4.8 percent is not only well above the historical average annual gain, it’s the most optimistic projection for 2017 that we’ve seen from our expert panel over the past five years.
Although most pessimistic experts still expect a sharp slowdown to commence in 2018, even this group anticipates home values to increase an average of nearly four percent this year.
Given these projections, it’s a pretty safe bet that U.S. home equity growth will exceed $1 trillion for the sixth consecutive year, and continue to buttress consumer confidence and household spending in 2017, especially if more of today’s renters can afford the transition to home ownership.”
Finally, the latest results from Trulia’s Rent vs. Buy Report show that home ownership remains cheaper than renting in 100 of the largest metro areas in the United States:
“Nationally, rates would have to reach 9.1%, a 128% increase over today’s average of 4.0%, for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.”
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