For a while now, when brokers have been asked, “How’s the market?” some of them have answered by saying, “It’s adjusting.”
The question about the direction of the market comes from people who have thinking about selling and are wondering if they may have missed a peak in prices. It also comes from people who have no intention of selling, but are interested in tracking the value of their homes. And it comes from people who want to buy and are wondering if prices might have begun to soften.
The fact that the question is even being asked marks a change from the past several years in which the value of homes has increased steadily.
So, is the real estate market adjusting?
The chart above – which show sales price data for NELA as a whole and the chart below which shows the number of houses for sale shed some light on that question. While home sale prices were up year-over-year (Nov. 2017 vs. Nov. 2018), it is looking like 2018 will end on a slight pricing downturn.
The charts show that NELA home prices set records in the first three quarters of 2018. However, the number of homes for sale began to grow faster in the third and fourth quarters of 2018, creating more competition among sellers. The effect of that shows up in the fourth quarter, when home sellers began accepting prices somewhat lower than they might have hoped for even a few months earlier.
The same picture holds true for the real estate market in Highland Park. Inventory broke through expected levels in both the third and fourth quarters, and, accordingly, prices realized by sellers so far in the fourth quarter of 2018 are down from those realized in the third quarter of this year and about the same as those reached during the second quarter this year. For the moment at least, prices are not continuing their previous upward trend in Highland Park.
So, what the current data seems to be saying is that prices are adjusting to the increasing numbers of homes on the market, tapping the brakes on price increases for the moment.
Data produced by Jeffery Marino for the Boulevard Sentinel, sourced from Redfin.com, as reported by the local Multiple Listing Service (MLS) and public record.