Over the past several years, it has become evident that the residential real estate market is going through a recovery. Along with this, the number of unemployed workers has declined and interest rates have remained low. Obviously, the recovery of the real estate market is outstanding, but it is also uneven.
In other words, residential real estate in certain states is going exceptionally well, whereas in other regions, things are much slower. For states like Florida, Illinois, Michigan, Missouri, and Nevada, the market is moving in a positive direction. However, this causes certain concerns specific to the low inventory of existing homes, stiff competition among homebuyers, and longer wait times for new home construction.
Slowing in 2015
Even though the residential real estate market as a whole has stabilized and even grown in certain states, the housing market has begun to slow this year. Just in the past few months, the number of pending home sales is down. Part of this has to do with weather, but an increase in mortgage rates and a 12 percent jump in home prices are also to blame.
Prior to the recent market crash, we saw the biggest financial and residential real estate bubble, followed by the longest recovery period since the Great Depression. Fueled by easier financing, housing prices topped out by 2007. Then, the market completely crashed, taking almost six years to get into a healthy recovery mode.
Based on what people experienced, the buyer’s mentality completely changed. As a result, a large number of people began renting as opposed to buying, which caused a shift in the housing market.
The recent market crash is still very fresh in some people’s minds, but instead of worrying, people need to understand the recent residential real estate slowdown.
- Fewer short sales and foreclosures
- Historical slowing for a few months after residential real estate recovery
- Slowing of bank and mortgage company failures
Overall, the residential real estate market remains in good shape with homes being affordable throughout the country.