The Real Estate Market Trend is Your Friend – Until It’s Not

In the residential real estate market, we often hear the phrase, “The real estate market trend is your friend.” This saying reminds us that following the market’s trend typically leads to success. However, trends do not last forever. They can pause or even reverse, offering great opportunities to those who are prepared.

Since 2012, the residential real estate market has experienced a steady rise in home prices. This upward trend paused briefly in 2022, but since then, prices have resumed their climb, as shown in the latest data from 2024.

Key Indicators in the Real Estate Market

Two major indicators help determine the health of the residential real estate market: inventory (the number of homes for sale) and buyer demand (measured by how long homes stay on the market). In February 2022, active listings reached a low of 376,018 homes. As of August 2024, that number stands at 909,344 homes, still lower than pre-pandemic levels of 1.4 million.

In terms of buyer demand, homes spent just 31 days on the market in May 2022. By August 2024, that figure increased to 53 days, though it remains below the pre-pandemic average of 86 days.

Opportunities in a Changing Market

What’s happening now is interesting. Although home prices are still rising, the underlying fundamentals, like inventory and demand, are shifting. This divergence signals that we may be entering a period of uncertainty. However, with uncertainty comes opportunity for those who act.

After a long period of increasing prices, the next few months could offer great buying opportunities. Smart investors see these moments as chances for long-term gains, while others may hesitate out of fear. Now is the time to pay attention to the real estate market trends and take action.