Real estate market conditions are on the move this year, as many experts predicted it would be. Although an overall softening of the real estate market was expected to be the national average this year, unexpected drops in mortgage interest rates have instead served as a "shot-in-the-arm" for home sales, said Frank Nothaft, chief economist for CoreLogic, one of the nation's foremost real estate and finance market analytics companies.
And the extra activity in the real estate market has been pushing prices higher.
CoreLogic's latest report shows that as of the end of May, home prices across the U.S. were up by 3.6 percent in year over year comparisons. The report predicts we will see another 0.8 percent rise by the end of June. And overall, there could be as much as a 5.6 percent increase in home prices by May 2020.
Unfortunately for many parts of the country, including much of Florida, home prices are already inflated beyond sustainable levels.
"The recent and forecasted acceleration in home prices is a good and bad thing at the same time," said Frank Martell, president and CEO of CoreLogic. "Higher prices and a lack of affordable homes are two of the most challenging issues in housing today, and every buyer, seller and industry participant is being impacted."
Reports like these should be eye opening for home buyers and sellers alike, said Ron Wysocarski, CEO and Broker of Wyse Home Team Realty in Port Orange. The conditions aren't just affecting larger markets in New York and California. Home buyers and sellers in Volusia and Flagler counties are also feeling those pain points.
Many of the area's buyers are feeling the pinch of higher priced homes, particularly first time buyers, Wysocarski said. And sellers also feel it as more deals drop out due to their buyers' financing falling through as those purchasers push the limits of their budgets and loan approval amounts.
"Unless something changes here to bring up the average wages of people living in central Florida, we are likely to see a dip in home values on the not-too-distant horizon," Wysocarski said.
Wysocarski says potential home and condo sellers across Volusia and Flagler County should be on high alert right now. When the average person in an area cannot afford the average home in that area, it's safe to assume there is a market correction coming.
"Basically, these reports are telling you that your home value is about to take a hit," Wysocarski said.
Locals who plan to live in their current homes for the next several years need not worry, he said. Experts are predicting a softening of the market.... not a crash. Your home value will recover from a simple market correction.
But if you're on a shorter timeline, with plans to upsize, downsize, or relocate in the next 12 months, waiting to sell may not be in your best interest. For you, the clock is ticking. We recommend you list your home now, while the market is hot and prices are at a nice peak.