With different trends in the housing market over the first half of the year, a housing economy expert believes “the market is moderating and this is the new normal.”
Using residential housing contracts from 11 Southeast markets this year, housing economy expert John Hunt of MarketNsight and ViaSearch said “growth is going to be organic and sustainable” – just a steady flow; in moderation, as he doesn’t foresee any sudden collapse or major growth in the market.
Across the 11 Southeast residential housing markets, January saw a boom in sales followed by a cool February to April and reports of a rebound and even a year-over-year increase in May.
“There is an absolute ceiling on home prices, and the market will make corrections as needed to correct pricing,” Hunt said in a news release. “Sellers dropped prices between February and May to hit the price the market would bear. This is why we see such strong May sales data. Home prices dropped to levels buyers could afford."
Hunt expects 5% year-over-year growth, although he said in the release that builders may not be able to catch up due to a lack in lots and tight construction lending. On the other hand, resale homes
closings are still big, making up 80 to 90% of all transactions in the Southeast market.
"This is normal organic growth that is trending with job growth and in-migration,” he said. “Of course, there is also the occasional millennial who decides it is time to join the real world and purchase a home."
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