The current issue of REALTOR Magazine is hot off the press. In the issue, Lawrence Yun, the Chief Economist of the National Association of REALTOR, states a few of his observations.
Stagnant Home Sales: The past four years
Lawrence Yun starts his article by pointing out that “sales have been moving sideways in recent years.” What Dr. Yun means by this, is that the number of sales for 2016 to now are roughly the same. In a growing economy, the number should be increasing. Dr. Yun questions why there are stagnant numbers in an otherwise growing United States economy. Individual net worth certainly has grown, so why haven’t home sales?
One speculation Dr. Yun has for the slow sales is “reduced tax benefits for homeowners.” Nevertheless, he is quick to mention the fantastic mortgage rates currently under 4%.
Future Economic Outlook
The outlook isn’t soo gloomy for Dr. Yun. He is hopeful that “building more spec homes and at lower price points where demand remains the strongest” will help ameliorate today’s real estate landscape. He certainly believes that homebuilders are building these homes for the buyers who need them.
Further good news is that the “pending contacts rose in June in all major U.S. regions, marking the first year-over-year gain in 17 months.” This will mean that we will be seeing many closings later on in the year.
Commercial Real Estate Outlook
Interestingly, Dr. Yun has also looked at commercial real estate rental rates, and notes that there is a large need for commercial construction in the United States. Yet, one of the hurdles Dr. Yun is uncertain about is “the impact of the intensifying trade war on corporate investment and the stock market.”
Talk to Sellect Realty about real estate economics/outlook. We are in the Atlanta market, and would love to chat.