For the past five quarters, the majority of Americans said their housing markets were overheating. Now, in the 4th Quarter, 75% of Americans say their local housing market is starting to cool, according to ValueInsured’s Q4 2018 Modern Homebuyer Survey. Homeowners in California, Colorado, Texas, and Washington are most likely to say their local market is starting to cool off.
The survey “revealed some concerning evidence about the changing psychology of the housing market,” says Robert Shiller, a housing economist. “We will be watching these numbers as they unfold over the future.”
Investors, Flippers Blamed
Seventy-two percent of Americans and 78% of “urban residents” say home prices are still too high. Urban homeowners blame “flippers and speculative investors” and “wealthy transplants from more expensive housing markets” for inflating their local home prices to unsustainable levels, according to the report.
Some home buyers may hit the pause button to see what happens in the housing market. Fifty-nine percent of interested home buyers (which includes first-time and move-up buyers) say they plan to wait for a “meaningful correction” before they buy. Fourteen percent say they plan to not buy at all until a correction occurs.
Several markets are seeing home prices slow. ValueInsured’s report notes that the fastest drops in home prices have been happening in Seattle, and North Texas has seen some of its largest sales declines in seven years.
“Buyers have switched from ‘hoop jumpers’ to bargain-hunter mode,” says Joe Melendez, CEO and founder of ValueInsured.
See the chart below: