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Price Deflation Hits the Housing Market

Originally published by CNBC on September 20, 2018 Read the original article.

The rebound in U.S. housing prices that began in February 2012 has been especially strong in parts of the West.

The August 2018 Elliott Wave Financial Forecast provided a perspective:

Last month we discussed the peak-mood importance of a “prevailing enthusiasm for real estate.” The asking price for a 157-acre strip of land in Beverly Hills, California accentuates this point. The mountain-top site, with a 360-degree view of Los Angeles, is now available for $1 billion. The same property sold for $8.7 million in 1997. No one will actually pay $1 billion for it, of course. But the fact that California real estate interests are even entertaining the prospect shows just how far into the stratosphere real estate expectations have stretched.

And, now comes the descent from that stratospheric level.

Read this excerpt from a Sept. 20 CNBC article:

After three years of soaring home prices, the heat is coming off the U.S. housing market. Home sellers are slashing prices at the highest rate in at least eight years, especially in the West, where the price gains were hottest.

In the four weeks ended Sept. 16, more than one-quarter of the homes listed for sale had a price drop, according to Redfin, a real estate brokerage. That is the highest level since the company began tracking the metric in 2010. Redfin defines a price drop as a reduction in the list price of more than 1 percent and less than 50 percent.

‘After years of strong price growth and intense competition for homes, buyers are taking advantage of the market’s easing pressure by being selective about which homes to offer on and how high to bid,’ said [the] senior economist at Redfin, in a release. ‘But there are some early signs of a softening market, and the increase in price drops may be another indicator that sellers are going to have trouble getting the prices, and the bidding wars, that they may have just months ago.’

You can read the entire article by following the link below:

https://www.cnbc.com/2018/09/20/home-sellers-are-slashing-prices-especially-in-california.html

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