If you’ve been checking into the St. Cloud listings from time to time, you might be puzzled by the number of experts who refer to a ‘housing market downturn’ or ‘real estate recession.’ The St. Cloud listings regularly show new properties coming onto the market—just as they record those that go under contract and, later, join the ‘SOLD’ group. With asking prices that aren’t exactly in buyers’ market territory, the ‘downturn’ characterization could be confusing.

Last Thursday, when Realtor.com’s chief economist Danielle Hale appeared on CNBC’s Squawk Box program to discuss the latest housing market news, the discussion provided some clarity on what today’s ‘downturn’ means for homeowners and prospective buyers. A large part of the ambiguity stems from how the term ‘housing market’ is understood.

Here are bullet points from that interview:

·         Sales continue to lag in the existing home market—yet the prices being paid for those that sell are mostly rising or holding firm. The short sales volume is largely due to the widespread phenomenon of existing mortgages with low interest rates which homeowners are extremely reluctant to abandon.

·         Sales of new homes, on the other hand, reflect “a surge in demand.” That should come as no surprise since the existing home market is so starved for inventory.

·         Taken together, the housing market is estimated to be underbuilt “by two to six million homes”—meaning home builders “have a lot of opportunity.”

·         Today’s mortgage interest rates may undermine the financial ability of middle-income Americans to buy, but Hale projects that “once we move into the second half of 2023 and into 2024, I think things are going to look better.”

·         In March, the average home price for all housing in the U.S. (existing homes new and old—condos and townhouses included) was a healthy $761,540.  

The downturn and recession characterizations may persist for a while, but perhaps a more apt summary could be found on ever-practical ramseysolutions.com, which recently advised:

 “Now, if you’re thinking of selling, don’t stress. The average house price in 2023 is still higher than in past years, so odds are you’ll still make a pretty penny.”

If you’ve been tracking the St. Cloud listings for a while, you’re apt to agree…and if it prompts you to investigate how properties similar to your own have fared recently, just give me a call! 

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