The pandemic has created a frenzied real estate market across much of the United States that has not yet subsided. However, economists say the market cooled somewhat in July – perhaps a sign that the wild price hikes of the past year may have deterred some buyers who would rather wait for the situation to calm down, stay or continue renting.
Nationally, average US house prices remained stable at $ 385,000 from June through July. At this point, that's 10.3 percent more than last year, according to the latest data from Realtor.com. It's growth slower than the 12.7 percent surge in June 2021, and it's the third straight month that year-over-year gains have slowed.
"There's a lot of shock to buyers," said John Burns, general manager of John Burns Real Estate Consulting, based in Irvine, California. “People who are a little more investment-oriented or who may already own a house have withdrawn. "Mr. Burns said prices could see a correction in many markets over the coming months – but not dramatically. "If prices go up 20 percent and then drop 2 percent, that's not the end of the world," he said.
"It's moving from super hot to normal hot right now," said Lawrence Yun, chief economist for the National Association of Realtors, which has not yet released its July data. "It's still a seller's market."
It could also signal a return to a normal seasonal slump as many schools are back in person and delayed summer holidays are finally underway. In 2020, the market nearly stalled after the Covid bans hit in the spring – typically the busiest season of the year for home purchases. But it came back to life in the summer when people moved to bigger homes or left the cities for the suburbs, even though inventories across the country fell sharply. Home buyers continued to flood the market with demand through the fall and winter, peaking last spring.
Economists say the housing impact of the Delta variant is likely to be to accelerate the hybrid and homework trend that is driving buyers to move to larger homes – a trend that often keeps people farther from downtown or less expensive cities. And interest rates remain low, another contributing factor to the rising demand for housing.
Danielle Hale, chief economist at Realtor.com, said the slower price growth last month was skewed because a larger proportion of smaller, entry-level homes came out compared to last year, which has reduced average price growth overall. But a typical 2,000-square-foot home still saw a brisk price increase, 18.7 percent from July 2020.
"This is good news for buyers looking for smaller, entry-level homes," said Ms. Hale. "I still wouldn't say there are a lot of houses, but there are more of them for sale now than there were a year ago."
The most dramatic price increases have been in western states, as well as in the suburbs and outskirts, where buyers are looking for larger single-family homes at relatively affordable prices. Austin, Texas saw the biggest increase, with prices up 40 percent year over year, Mr. Burns said. According to Realtor.com, prices were the softest in the Midwest and Northeast.
Patton Drewett, a real estate agent with Compass in Austin, said homes under $ 1 million were the most sought-after in his area, with the price spike being partly caused by buyers moving to Austin after moving out of more expensive cities like San Francisco, Los Angeles and New York. "I have to put up five to ten offers on houses to get a contract," he said. A customer recently submitted an offer for $ 975,000 for a home for $ 800,000. You didn't get the house. "It definitely feels like the Wild West when it comes to people's willingness to pay."
Mr Drewett said he saw a slowdown in July, with houses receiving between two and ten offers – from 30 to 40 offers a house might have received in the spring. But in the past two weeks shoppers have come back from vacation and are buying homes again, he added.
Nationally, it took the average home 38 days to sell in July, which is up slightly from 37 days last year, according to Realtor.com, another sign that things are slowing down a bit. The number of homes available for sale rose 6.5 percent year over year in July, which, according to Ms. Hale, is a leading indicator of where the market is headed. "It will still be a competitive market," said Ms. Hale. "But we'll start to see more balance."
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