For only the second time in the last 8 years we are seeing hints of a cooling trend, or flattening out, in the pace of real estate sales and price appreciation in what has been a hyper competitive housing market. (The last breather occurred in the summer of 2013.) In the second quarter of this year, during what is traditionally our most active real estate selling season, we saw a drop in sales volume in each successive month, and flat prices nationwide.
We also note that foreign investors, have reduced their purchases of US residential real estate year over year for the first time in almost a decade.
Now we are not suggesting that a reversal or decline in housing value is imminent. The labor market is too strong, and the nationwide housing shortage too great for most economists to see this as a real estate bubble beginning to burst. But it is apparent, that in spite of the nationwide shortage in housing, high prices and rising interest rates are finally slowing the rate of appreciation and the speed of sales.
The good news is that this should mean that buyers should be seeing a small but welcome improvement in available inventory and a little less frenzied competition.