Real estate continues to normalize and shift from an extreme seller’s market to a less extreme seller’s market. Both the leading and lagging real estate indicators illustrate a slowly moderating housing market. The numbers show that things are changing, nothing is happening too quickly, so the movement is relatively healthy and going in the right direction. Buyers have more options and sellers are making some concessions.
The American economy is big, like nearly $23 trillion big. For perspective, one billion seconds ago it was 1990. One trillion seconds ago was 30,000 BC. The foundation of this giant machine is based on the fundamentals of supply and demand. The price of a loaf of bread, the house down the street, and even 2676 Bayshore Drive (sold for $33.2M in March) is established based on supply and demand.
The market is softening = slowing = normalizing = moving closer to balance which are all good things even though it feels weird. After the wild ride of 2020 and the nearly non-existent inventory levels of Q1 2021, the real estate market is working out its kinks. I have mentioned it before and will say it again, it is impressive what a person can get used to. We got used to 10 or 15 buyers for each listing. We even (kinda) got used to only 4,000 active listings (when we should have 25,000). Now we have to prepare today’s buyers and sellers (and ourselves) for another new normal, a much healthier one.
In this 19 minute video, Lydia Wietsma and I discuss the latest in forbearance, extensions, and tax liens. We share this information to help provide guidance for real estate professionals and struggling borrowers.
Today is all about the AZ market. On Tuesday, Lawyers Title hosted a presentation with Tina Tamboer with the Cromford Report. She always shares pertinent and timely information. Below I have combined a lot of her information from her presentation, along with additional information from my research.
It is incredible what a human can get used to. Some people are afraid of moving into a more normal, more balanced market. We got used to operating under extreme pressure due to high demand and low inventory. That market isn’t healthy and it peaked in March. Now, we are, very slowly, moving towards a healthier market and it is a good thing.
The real estate market continues to shift and change, slowly moving towards normalization. Prices continue to increase, demand is slightly subsiding, and inventory is growing (and has a LONG way to go). The intensity is cooling (from 500 degrees to 350 – its still HOT), and fatigued buyers are writing fewer offers before one is accepted. The headlines attempting to explain the still very hot, yet cooling market seem to be causing more confusion than clarification.
In this 18 minute video and post, Lydia Wietsma and I discuss the latest in forbearance, extensions, tax liens, and servicing.
While today’s residential real estate market remains unhealthy (remember when 10% appreciation was a lot?), initial progress has been made. Prices are leveling off, supply is increasing, and immediate sales are declining. This is good for buyers, especially first-time homebuyers, which are foundation of the real estate market.
This week was week number 13 of continued improvement in the forbearance numbers and are now down to 4.18% of loans in forbearance or about 2.1 million borrowers. This is fewer than half the total amount of borrowers who were initially in a forbearance plan in May of 2020 which was about 8.47% of borrowers which was way below the predicted 30% of borrowers who were expected to go into forbearance.
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