The way I get a feel for the tone of the real estate market update is through 100’s of our active and pending listings, industry articles as well as dozens of conversations I have each day with buyers, sellers, agents, mortgage brokers and title professionals.
We negotiate many deals each day and this gives us great insight into what I consider to be the most accurate and real-time pulse of real estate. Any mention of politics in my market reports is strictly intended to share my take on how politics affect the real estate market and are in no way meant as a way to push any particular political agenda. That said…
Political and Financial Factors Affecting the Real Estate Market Update:
- The new administration’s Make America Great Again agenda is stalled and I don’t forsee that changing in the second quarter.
- The DOW breaking of 20,000 was a rally anticipating big business and banks would benefit from tax reform and deregulations.
- Many predicted that the new administration would have their way but due to failed ACA repeal, one should not expect a fast track to tax reform.
- The DOW is always very stingy on giving back gains.
- Overall consumer confidence remains relatively high.
In conclusion, I think the bloom is off the rose.
Are real estate prices slipping? Yes. Interest rates moved up ½% since my last report in December 2016 post-Trump victory. My forecast at that time was steady-to-up for real estate prices and stocks.
What I didn’t anticipate in my last report was a fractured republican effort regarding the Trump agenda nor the Russia-Trump saga.
We are now at a break-point and a few things do concern me, each of which are significant in their own way. Let’s go to real estate prices, the economy and interest rates. It appears buyers remain focused on value. My gauge of real estate is based on our call volume, listing volume (new listings) and offer flow.
I see a mixed bag, still showing signs of possible strength as new listings are coming in at a pace which is 7/10. It feels like 2015 to me and not the sluggish pace of 2016 nor the fast pace of 2014. I do not see interest rates as problematic. What I see as problematic is consumer confidence dropping as Trump falls short of market expectations.
When I say market, I mean stocks more than real estate. Real estate follows signals from other indicators such as consumer confidence and the public’s overall feeling of well-being…in particular, their 401Ks.
At this point, I see stocks and consumer confidence the big question. Amazingly, with all of the political uncertainly and drama, the DOW is still north of 20,000. Should the DOW support crack back through the 20,000 level, I would expect a retest of DOW 1840 followed by consolidation.
The overall Florida real estate tone hasn’t changed much other than Miami-Dade and Naples seem to be softer. These two markets had been leaders. Manhattan real estate has been said to be softer as well. I feel prices in Florida will remain tempered at best. In contrast, certain cities in the US are reflecting record high sales prices such as Denver, San Francisco, Portland and San Jose.
My recommendation as ususal: price your real estate aggressively with no wiggle-room. Price your homes at “happy-walk” numbers.
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In other news, I am about halfway through writing my new real estate book. The book will reveal insider perspectives geared to help the consumer prepare for buying and selling real estate . Some of you have spoken with me and understand my take on pricing and negotiations. In my next blog, I will share an unedited excerpt from the book. The topic: Wiggle room is good…everyone wants to negotiate, right? NO—they don’t!
Stay tuned for more and as always, thank you for choosing GetMoreOffers.com.
Keith R. Gordon
Authorized Broker for GetMoreOffers®
ADDvantage® Real Estate Services