Is The Real Estate Market Cracking?

Written by Posted On Thursday, 23 August 2018 13:27

Is the US Real Estate Market Showing Signs of Cracking?


According to recent reports, the United States real estate market is showing signs of decline. Sources have revealed that even the hottest markets, there is a limit on affordability.

In recent trends, the housing market has seen less activity in terms of offers. Previously, homes would receive 10 to 15 offers but now they are only getting about 2 offers.

While offers are in decline, homeownership among younger people is going up. Those who are under the age of 35 are the ones who are looking for homes to buy, as the rates of purchases among these people reached its highest rate in five years.  



The latest numbers in the housing market are not very encouraging. The amount of sales for both existing homes and newly built homes has fallen in June. This is the lowest level of home sales in over a year.

While prices are rising, the overall gains are going down and slowing. As well as overall sales declining, mortgage loan applications have also fallen in recent months. Another thing that has happened is that mortgage rates have recently risen as well. The construction of single family homes has fallen and is lower than what it was the previous year in 2017.  

One of the most notable examples of this trend is in Denver which is one of the hottest real estate markets in the nation. Home sales went down by over 5% in June even when prices were at its all time highest. Real estate agents in the area believe that this was due to a lack of available homes for sale. Yearly prices have been going up each year for the last two years which is favorable for homeowners. However, the sales figures that are going down due to less inventory according to experts.  

The current slowdown in real estate sales is currently tied to increasing prices. Even in markets that are hot, there are limits to how much consumers can afford. As a result, this limit is currently being reached. In markets such as Southern California, home sales of all homes has diminished quite a bit since last year. Demand is still very high, but more and more listings are beginning to show reductions in price. Homes are also seeing fewer offers, among the lowest in recent years.  



Real estate agents and professionals are working with sellers to find ways on how to make more realistic decisions in regard to home prices. In recent years, sellers have had a very lenient pricing strategy. However, this strategy is no longer working due to buyers being less abundant than in previous years. As a result, many properties are now going down in price.

The new trend in pricing will likely cause a sales slowdown and convince sellers to offer their homes at prices that are more in line with actual market value. There has also been a slower recovery of homeownership due to this decline in pricing. But for now, however, the slowdown in home sales and prices has not prevented actual home ownership levels to remain relatively stable.  



  In 2017, members of the millennial generation began entering the housing market in huge numbers. However, there was a major shortage of homes for sale along with rising prices. As a result, getting a home would require a bidding war in which many would lose.

This led to them being priced out of the homes they wanted to purchase. One individual said that they looked to buy a home at a higher price point which would result in less competition. The individual would put down two offers and both times, another buyer would offer all cash. Therefore, this individual repeatedly lost out on getting a home.  

Homeownership among younger adults is going up, according to recent reports. Those under the age of 35 have been able to purchase homes and attain homeownership. The ownership of homes among this segment of the population reached its highest level in five years.  

Among those 55 and older, homeownership has declined. In the real estate market, homebuyers have had to adjust their home search in response to the higher costs.   The main reasons why the market has seen declines in recent months is because of a lack of affordable homes and a shortage of inventory.

Those who are looking to buy a home now have fewer options with homes being offered at $250,000 or lower. In terms of inventory shortage, homebuilders are not able to build lower priced homes due to labor and material costs. Investors who bought up distressed homes during the housing crash turned the homes into profitable rentals which they still own today.  

As of today, the market is still favorable for those who are looking to sell a home. They are still able to sell their house at a high price and make a substantial profit. They will also get plenty of offers for their home as well. For those who are a real estate agent, they will still be working in a seller’s market.

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Dean Cacioppo

Dean Cacioppo Credentials

Dean has worked as a real estate agent, real estate instructor and has years of experience working on the technology side for major Real Estate Brokers, Agents and MLS’s.  Dean has sat on the Board of Directors for multiple MLS’s including being elected to President.  Years of serving on a number of MLS Committees for multiple boards, served on the Strategic Planning Committee for Louisiana REALTORS and participated in many task forces and committees for the benefit of all Real Estate Agents in Louisiana.

Work in Real Estate Technology

Dean has provided live training on technology, direct IT and Technological Support to thousands of Real Estate Agents for over 16 years.  With years of being the go-to guy on technology strategy, training and support for Brokers and MLS’s across the country, you can now have direct access to Dean for your personal technology needs. 

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