Since the recession back in 2008, the real estate market has recovered very well. The speed of that recovery is now slowing down due to the impact of the Covid-19 virus. However, we all hope we don’t see the real estate market imploding like it did in 2008.
It’s not uncommon for the real estate market to fluctuate and it has favored the sellers for quite some time now. Here’s a look at some of the signs of the housing market slowing down.
Whenever inventory increases, it can be the first sign of things to come. When the real estate market starts to cool off, it usually happens when more inventory becomes available.
Currently, homes throughout the Mint Hill area are selling at an average of approximately 40 days on market. If these homes start to stay on the market for two months or longer, it could be an early sign of the housing market slowing down.
Drop in Prices
Another indicator of the housing market slowing down happens when prices start to fall. When prices drop by 10% or more, it’s a sign the market is going south. Right now, this isn’t an issue, but if prices start to drop, even by just a few percentage points, it could show signs of the housing market slowing down.
Increase in Unemployment
Unfortunately, Covid-19 has already caused many people to lose their jobs. Many businesses have had to shut down, temporarily and permanently. The higher the unemployment, the fewer people can buy homes and the housing market will ultimately slow down because of it. Unemployment can also lead to people defaulting on their mortgages. More foreclosures and short sales could possibly hit the market later this year.
Stock market crash
The stock market has taken a hard hit in the last few weeks. No real signs of recovery are on the horizon. Will it get worse before it gets better? A buyer that had their home-buying funds in the stock market is definitely not buying right now. It will take time to recover those losses. Consequently, less money at a buyer’s disposal means fewer home purchases will take place, and the real estate market will be affected.
While the housing market wasn’t expected to hit a significant slowdown through 2020, many believe it will slow down and continue to slow down in the next few months. Prices may stabilize or even drop a bit, but hopefully not as badly as in 2008. Even though the market may be slowing down a bit, experts still expect it to recover again, and hopefully at a quicker pace than in 2008.
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