By: Kristen Pell
Home sellers may be frowning, but homebuyers might have a little more bounce in their step, because 2.5 years of rising home prices may all be coming to an end. Is this a temporary pause, or does this mark the beginning of the market that buyers have been waiting for? For sellers looking to sell at the top of the market the reality is it’s already too late. The market has peaked, and we are now on the downside of the record high prices we have experienced over the past two years. After a three-year consistent increase, we have seen the first dip in median sales prices over the past month.
The active market is seeing price reductions of 20 to 1 as compared to price increases. This happens as days on market goes up!
Though sales prices and volume of sales are down, inventory has increased about 8%. The increase in inventory and decrease in sales will continue to put downward pressure on home prices. A healthy market should have an inventory of about 6 months’ supply.
What is most important to understand is that this is a market correction not a crash. The market in southwest Florida saw such a drastic increase over the past two years and it was inevitable that it would eventually start to regulate. Though the market is regulating there is still no need for concern over the current trends.