This summer marked the slowest housing market in 10 years. It was so slow, in fact, that the pace and volume of sales resembled what you’d typically see in the fall or winter—when frigid temperatures, school slogs, and looming holidays cause real estate to go dormant until the new year.
This summer wasn’t just bad for buyers. Everyone suffered, from sellers to builders and beyond, according to a study by Realtor.com economist Jake Krimmel, aptly titled “Cruel Summer: Why the US Housing Market Is Stuck.”
Still, since Labor Day is next week, it’s high time to turn the page and see what’s coming down the pike for fall. Spoiler alert: The forecast seems to be looking up.
Fall = best time to buy?
Autumn’s biggest bounty may arrive on September 16–17, when the Federal Reserve will decide whether to cut interest rates. Currently, the odds of that happening hover at over 88%.
Rate cuts aside, the seasonal decline in buyers during cooler months means less competition and more desperate sellers. As a result, “fall and winter can be among the best times to buy, especially for investors,” says Krimmel. “With 25+% year-over-year inventory growth and price cuts on over one in five listings, we’re coming to the end of the most buyer-friendly summer since we began collecting data in 2016. I expect that trend to continue into the fall and winter.”
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In particular, prices are falling fast in the South and West, so some investors may see this as an opportunity to buy low in growing markets (like Austin, TX; Raleigh, NC; and Charlotte, NC), which are likely to keep strengthening, adds Krimmel. Meanwhile, the Midwest and Northeast are likely to continue seeing rising prices.
“Summer was much slower for me as an investor,” admits Ralph DiBugnara at Home Qualified. “Higher interest rates combined with higher prices in my region [New York] have made it harder to find properties that are cash flow positive. Buying today really means anticipating a rate drop over the next 24 months and refinancing to create more of a positive return. That method can be effective once rates drop to mid-5s, and historically, if that happens, home values will go up.”
Another standoff that might ease this fall is the rift between what buyers are willing to pay and what sellers are willing to accept.
“Seller sentiment appears to have shifted: We do a lot of direct-to-owner advertising for purchases, and we’ve seen a giant uptick in sellers looking to revisit offers that they previously declined,” says Ryan Dossey at SoldFast.com. “Similarly, we’ve had buyers put in over asking offers. I think we’re going to have a ‘green Christmas,’ with sellers being more realistic and buyers looking to take advantage of anticipated lower rates.”
Here’s to hoping he’s right.