Uncertainty seems to be the issue of the day. Are the current frigid temperatures just weather or is it
climate change? Will the Patriots bring home a 7th Lombardi Trophy next year? Will the real estate
market expand or contract in 2019?
For the first two questions, we can only guess. And while prognosticating about the real estate market
for the entire year of 2019 would also be little more than a guess, we may be able to offer a little more
clarity with respect to the early spring market, which historically begins in the latter part of February
Today’s quick check of MLS reported sales closed sales for January 2019 shows a 11% drop in Dane
County from 2018 reported levels (16.5% drop for the entire MLS service area of 15 counties). While
the lower reported sales could just be a hangover from the higher interest rates we experienced late last
year, low inventory levels continue to be the main culprit.
Currently, active listings across our entire MLS service area are a little bit higher than levels reported
last year at this time, although the overall supply of inventory for the entire region still stands at a
meager 2.5 months. (As a general rule, a 6 month supply of homes for sale is considered a balanced
market between buyers and sellers.) While we expect increased numbers of sellers to begin putting their
homes on the market soon after Super Bowl weekend, in the long run we expect to see the supply and
demand imbalance to remain very much the same as last year.
Adding pressure to the buying side of the equation: Interest rates have actually dropped over the last
couple of months meaning greater affordability for more buyers. Rates for 30 year loans now hover
approximately ½% lower than in the fall of 2018. In comments last week, Federal Reserve Chairman
Jerome Powell stated, “The case for raising rates has weakened somewhat,…”, indicating there will be
yet another opportunity for Buyers to purchase in the short term and enjoy lower interest rates and lower
payments for the long term.
In possibly suspending its previous plans to continue raising rates this year, the Federal Reserve signaled
that its march toward higher interest rates may be ending sooner than expected. This should be good news
for buyers for at least the next 6 months.Of course, geopolitical and financial issues outside of the
direct real estate market can always change even these estimates on a moment’s notice. Smart sellers
will get their home on the market early to enjoy offers from the most qualified buyers. Smart Buyers will
get pre-approved and not be afraid to venture out in the snow to see what is available before it is gone.
At Restaino & Associates, we are experts in helping both sellers and buyers achieve their real estate
dreams. Let us help you turn your dreams into reality. We want to be your Realtor of choice in today’s
fast moving market.