Fortune released the article below by Lance Lambert last week titled, “There’s a big shift happening in the housing market; the housing market is cooling as shoppers finally push back at record prices.” Here are the key takeaways to consider. 

• The Q2 2021 median house sale prices in Lamorinda were 19% higher than Q2 2020!
• Buyers did take a seasonal break as summer vacations took priority.
• Buyers are still tired and weary of paying new high prices.
• A market cool down or shift doesn’t mean lower prices.
• It is still a Seller’s market but Buyers may have a more normalized process with fewer offers (unless it is the house that meets the needs of a large Buyer pool). 

Buyers, if you decided to take a summer break, the quicker you make housing a priority the better. Our Buyers are getting into contract a little easier right now. It is time to finally go get the house of your dreams.  

Sellers, it is still a great time to sell but understand just how much higher your list price is vs. one year ago. Today’s prices are incredible! 

On another note, Kelly Wood is leaving our team after several years as a Buyer’s agent with us. We are grateful for her contributions and wish her well. Sarah Kellar, who has been with our team for 15 years, will transition to her position and will join Wendy Means as our Senior Buying Team Specialists. We all learned to pivot beautifully in 2020 and look forward to a seamless transition for our clients. 

Dana Green

There’s a big shift happening in the housing market

The housing market is cooling as shoppers finally push back at record prices.
BY: LANCE LAMBERT - Fortune
August 05, 2021 2:04 PM EDT

 Breakneck. That’s the best way to describe the pace of the 2021 housing market.  

The bidding wars got so intense this year that home price growth set an all-time record. 

But the tide is turning. 

The rush of buyers into the housing market during the pandemic absolutely crushed housing inventory—the number of homes on the market—with that figure falling for 12 consecutive months. By April, housing inventory was down a staggering 53% from a year earlier. However, the trajectory has flipped: For two straight months the number of homes for sale has gone up. Homes listing on realtor.com rose 3% in May, then again by 9% in June. That’s not all: We learned last week that new home sales are falling—their pace in June was the slowest since the onset of the pandemic. 

Every indication is that the market is shifting a bit in buyers’ favor. 

Why the sudden cooling? Home shoppers are finally showing some reluctance to pay top dollar. 

“The housing market was too hot for its own good over the past year, and we’ve seen some buyers bump up against an invisible price ceiling,” Ali Wolf, chief economist at Zonda, a housing market research firm, tells Fortune. A Zonda survey of homebuilders last month finds that 61% of builders are seeing more resistance from homebuyers. 

This buyer hesitation was expected. After all, home prices can’t continue to grow at a 17% year-over-year rate indefinitely. At the end of the day, household budgets can stretch only so far. 

And more cooling could be on the way. As Fortune reported last week, the pace of real estate sales might slow as the last of the stimulus protections begin to lapse. The foreclosure moratorium, which prevented foreclosures on federally backed mortgages, came to an end on July 31. Next up will be the mortgage forbearance program, which allows some borrowers to pause their payments; it lapses on Sept. 30. That forbearance program still protects 1.75 million borrowers, or 3.5% of U.S. mortgages. Homeowners still hurting financially could opt to sell their home rather than restart their mortgage payments. Of course, if that happens, housing inventory would rise further. 

But cooling doesn’t mean home prices will fall. In fact, the research firm CoreLogic forecasts home prices will climb another 3.2% by June 2022. 

Make no mistake: This is still a seller’s market. 

“It’s important to note that many homes are still selling almost as quickly as they hit the market,” Wolf says. “The difference today is that there’s been ever so slight softening in the number of homes undergoing a bidding war or selling above the ask price…some homes are now selling below ask price.” 

The reason that research firms like CoreLogic think prices can go higher boils down to demographics. We’re in the middle of the five-year period when the largest tranche of millennials, those born between 1989 and 1993, are hitting their thirties—the age when first-time homebuying really kicks into gear. That’s something homebuilders haven’t been preparing for: During the 2010s, homebuilding tanked as builders struggled with the financial scars of the 2008 housing bubble and subsequent foreclosure crisis. Not to mention, the housing market is still benefiting from the perfect storm created by the pandemic: recession-induced low mortgage rates, coupled with remote workers who are willing to uproot in pursuit of affordable real estate.