Reasons Behind the Latest Housing Market SlowdownSeptember 06, 2018
Recently, it has become increasingly difficult for real estate agents to close deals due to a number of factors. Construction of new homes has been slowing down and there are fewer homes on the market. This has resulted in extremely high asking prices, causing people to either prolong their home search or battle it out with competing homebuyers. The housing market is showing no signs of speeding up as experts predict it to be like this for the rest of 2018.
So, what exactly are the reasons for this slowdown?
1. Less Construction
Fewer homes are being built, resulting in fewer homes available on the market for purchase. Some people are attributing this to the tariffs on imported lumber and immigration laws that have made it challenging for builders to hire workers and afford the necessary materials.
2. Rising Housing Prices
With a low inventory of homes available, sellers have raised their asking prices through the roof. In turn, this is scaring away prospective buyers, causing them to rent properties for the time being. To put this in perspective, this past July saw the lowest amount of home sales in two years. Once more homes are built and inventory increases, prices are expected to drop, which will attract more homebuyers.
3. Foreclosures Making a Comeback
For the first time since 2015, the number of foreclosures occurring is increasing. This is mainly affecting areas with expensive housing markets such as Los Angeles. However, it is also having a strong impact on areas ridden by natural disasters like Houston.
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