Thoughts on Real Estate: A Crowded Market Spurs Buyer Creativity

By Gino Blefari

For many homebuyers, rising prices and low inventory continue to push the market seemingly out of reach. In the CoreLogic Case-Shiller September report, Seattle, Portland, and San Francisco experienced the steepest price hikes with 13.5%, 7.6%, and 7.4% increases respectively since last year. Also, the National Association of REALTORS®  says existing home sales were down 1.7% last month.

Yet despite these market challenges, our research shows that prospective buyers, particularly Millennials, remain positive about the market and are determined to find the home they want. This may be, in part, to the resourcefulness of buyers who have found increasingly novel ways to make their bid stand out.

Our national Berkshire Hathaway HomeServices Homeowner Sentiment Survey released in September found that:

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How July’s Real Estate Trends Affected Buyers

By Gino Blefari

In July, the real estate market faced a housing-inventory challenge with several reports showing an increase in home prices and decrease in home sales. For example, CoreLogic Case-Shiller reported home prices rose 5.6%, setting an all-time high for the sixth consecutive month. And the National Association of REALTORS® said existing home sales were down 1.8%.

These numbers may give some pause at first glance, but considering the basics of supply and demand, it’s clear the number of sales have decreased due to a small pool of available homes paired with a high number of potential buyers on the market. This shows us that home prices that steadily increase box many home seekers out of the market.

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Stephen Speaks: Builder Confidence

Builder confidence for newly built single-family homes slipped three points to 62 in November from an upwardly revised October reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The pullback is from an unusually high October reading. Still, builder confidence has hovered in the 60s for six consecutive months reflecting housing’s longer-term progress.

“Looking at these numbers this year has been like driving from house to house in a very nice neighborhood,” said Stephen Phillips, president of Berkshire Hathaway HomeServices. “Today’s number indicates slight variation in a very positive range, since anything above 50 indicates continued expansion. And we’re solidly above last year at this time. Nothing surprising, and a good report, overall.”

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Stephen Speaks: U.S. Housing Starts

On Tuesday, the Commerce Department reported that U.S. housing starts rose to a nearly 8-year high. Construction of new homes jumped 6.5% from August figures to a seasonally adjusted annual pace of 1.21 million units in September. This increase was bolstered by an 18.3% surge in multifamily units, though starts of single-family homes didn’t show as much strength, increasing only 0.3%. Stephen Phillips, president of Berkshire Hathaway HomeServices, weighed in on the latest figures:

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