Those regular, or even occasional, readers of my monthly opinion piece will likely be aware that I am a serious proponent of two things i) supply and demand and ii) real estate cycles. I’ve possibly beaten the first topic to death – those offering to sell their residential property and those wishing to buy these same commodities. These two groups dictate the prices at which these properties change hands (remember, willing seller – willing buyer). When, in the first quarter of this year there was an excessive number of those wanting to buy and a relatively lesser number offering their properties for sale, the prices were rising and there was lots of competition to be the “lucky buyer”. A bull (or Sellers’) market prevailed. Then something started changing. Prices stopped their momentous climb and less properties were selling.
There has been much spoken about the why’s of these phenomena but to put it simply Sellers are not selling (either withholding their offerings from the market or asking more than buyers want to pay) or Buyers are just less confident of making the decision to buy. This change in activity likely means that we are heading into a new cycle. Note, I said “likely” as we do not yet have enough data to be able to make this statement with conviction. See how eager the press has been to base their ‘slump’, ‘plunge’ headlines on the August 2 to 15 – (two week!) sales stats, a ridiculous and some might say irresponsible act.
I’ve discussed the governmental (tax) action recently implemented and expressed an opinion thereon. Let us forget about the why’s and now concentrate on the data we will see emerging in the coming months before we rubber stamp the short term, medium term, long term direction of the market or in fact which cycle we are presently experiencing.