The price drop begins. Sales have been slowing down and inventory has been building up, but prices were not dropping yet. Now we’re starting to see the first signs that “real estate always goes up” isn’t a law of physics. Home prices in Mass. fall 3.5 percent in July – The Boston Globe,
Home prices in Massachusetts fell 3.5 percent in July, the largest decline in 13 years, as the slowdown in the real estate market finally led sellers to cut their prices.
… Sales of single-family homes began dropping last fall, but prices were slow to respond to the weakening demand.
… Massachusetts is not alone, though the sales slowdown began here before spreading to the rest of the country.
What does this mean? Yesterday I talked about how news of dropping prices will change everything.
Here’s the thing. Sales slowing and rising inventories necessarily mean that prices will start to drop soon. And just wait until THAT starts hitting the news. That’s the tipping point. That’s when people’s expectations change. Once people stop seeing house prices rising, everything will change. And when they realize that prices are dropping, everything will really change.
So as of now people understand that this is a market to get out or stay out of or you will lose money. From the article,
But Newton agent Rona Fischman said many are “still in denial.” The steep drop in July sales “tells me we’re in the first year of the price declines,” said Fischman, who is with Buyer Brokerage Realty. “Sellers who really have to sell are waking up and smelling the coffee. There’s more coffee coming.”
… “It’s possible we’re standing at the edge of a cliff, and if we wait the bottom will drop out” of the market, Wagner said about predictions prices will fall further. [emphasis added]