Autumn has traditionally been a slow selling season, but Redfin analysis suggests that may not be the case in 2014.
It’s a seasonal trend as tried and true as any in American business – the strong summer homebuying season gives way to a slow autumn, and both contract activity and buyer traffic slow noticeably.
This year, though, could see a reversal of that pattern, and in a recent analysis, Redfin highlighted several reasons for why the autumn of 2014 could be the hottest fall since 2008.
1. Slower Home Price Growth – The double-digit home price jumps of 2013 are a distance memory, as as each Case-Shiller report progressively shows, home-price growth is slowing to a degree that is much more manageable for homebuyers. Not only was price growth essentially flat in July (for the first time in five months), but also, 23.7 percent of listings nationally are listed for a reduced price (compared to 30.9 percent here in Chicago).
2. A More Balanced Market – With prices growing at a slower rate, we’re moving away from the seller’s markets of 2012-2013 and returning to a more balanced market. Case in point: 20.1 percent of homes sold above list price in July; that’s down from 26.8 percent in July 2013, and is the largest such drop of the year.
3. The Return of Buyer Confidence – It wasn’t easy being a homebuyer during the exuberant months of 2013, but Redfin surveys have found that with multiple offers, bidding wars and tight inventory waning, buyers are a more energized lot; additionally, the aforementioned slowdown in price increases will likely increase buyer confidence further.
4. Rates Staying Low – After their sudden increase last summer, mortgage rates have been consistently low in 2014, and despite the occasional rumor of shifting monetary action at the Fed, it’s very unlikely that rates will change. However, it’s all but certain that the Fed will take some sort of action in 2015, and that could further motivate buyers.
5. A Sensible Marketplace – Last year’s housing market was, to put it lightly, quite insane, what with rising home prices, falling housing inventory and dramatically rising mortgage rates. Many consumers, Redfin stated, sat on the sidelines during that zany marketplace, but they are expected to return to housing this fall.