After seeing one of the most competitive home buying in 2017, homeowners have reported a lighter, less competitive season in 2018, according to a survey by ValueInsured. According to the survey, 48 percent of hall homeowners reported noticing lighter open-house traffic and a less competitive homebuying season in their neighborhood compared to 2017.
In California, which was one of the hottest housing markets last year, 54 percent of all homeowners reported lighter homebuying demand, with 56 percent homeowners in Colorado and 53 percent in New York concurring with their counterparts in the Golden State.
The survey indicated that one of the reasons for the cooling market was that after three years of double-digit price gains in the nation's top housing markets, wage growths were not keeping pace with the prices. "While buyers have been conditioned to hurry up and make an offer, even sight-unseen, in recent years, some may now step back onto the sidelines to wait and see if – and how far – home prices could get cut before they jump back in," the survey said.
Citing various recent reports, the survey said that some of the hottest markets of 2017 had seen the most significant signs of cooling down this year. In San Diego, ValueInsured said, 20 percent of all listed homes had price cuts. In Seattle, where bidding wars had become common over the past three years, home prices saw a steep decline from their median prices. It also indicated that in Dallas, 19 percent of all listed homes had seen their prices cut at least once in June.
Home prices may indeed have reached their tipping point. According to a recent report by First American, Home price appreciation is slowing and may be close to a “tipping point.”
“We’re seeing the first indications that price appreciation may be slowing, but the underlying fundamental housing market conditions support a natural moderation of house prices rather than a sharp decline,” says First American Chief Economist Mark Fleming.
Read more about the First American report here: