The belief that many US housing markets are overheated appears to have changed, which could mean a shift towards a buyer’s market.
Three in four people say that their local housing market is “cooling off”, snapping the trend over 5 consecutive quarters that markets were overheated.
A survey by ValueInsured, reveals that millennials are particularly confident that things have changed with 72% saying that home shoppers in their neighborhood are less aggressive now compared to a year ago.
Almost two thirds of millennials (62%) said that they expect a home bought now to be worth less in a year from now.
First-time buyers may not be ready
The survey found that in the starter home market, 78% of millennial sellers believe it’s a good time to sell but it’s only the right time to buy for 38% of those who want to buy that home type now or in the future.
"The ValueInsured Survey revealed some concerning evidence about the changing psychology of the housing market," said Robert Shiller, the Nobel Prize-winning economist. "We will be watching these numbers as they unfold over the future."
Prices too high
Despite the belief of cooling markets, 72% of all Americans surveyed and 78% of urban residents believe home prices are still too high and 59% of all interested homebuyers (including first-time and upgrade buyers) say they plan to wait for a "meaningful correction" before buying.
"In August 2017, ValueInsured was among the first to report Americans' concerns about overheated housing and a possible correction," said Joe Melendez, CEO and founder of ValueInsured. "Fast forward fifteen months, Southern California is in its worst housing slump in over a decade, Seattle leads the nation in fastest home-price drop, and North Texas has the largest sales decline in seven years. Buyers have switched from hoop jumpers to bargain-hunter mode. Expect the market to stall in the near term."