Main Content

Housing Market Continues to Cool but Shouldn’t Cause Alarm

The Real Deal

Everything Real Estate in the San Fernando Valley
Friday May 28, 2021
Housing Market Continues to Cool but Shouldn’t Cause Alarm

According to the National Association of Realtors (“NAR”), pending home sales in April 2021 were down 4.4% from March 2021, continuing the downward trend of home sale volume. However, April 2021’s pending home sales were 52% higher than April 2020. All this suggests is what we’ve said previously: the housing market is cooling off, rather than crashing. At the end of the day, luxury homes are still selling well, but the median-priced homes are now moving at pre-pandemic levels.

Specifically, every region other than the Midwest (which has an abundance of affordable housing and saw a 3.5% increase in pending home sales) saw a decrease in pending home sales; the Northeast saw a 13% decrease month-over-month.

It’s axiomatic that homes will sell for whatever the market will bear (of course there are a myriad of factors that go into that, but that’s beyond the scope of this article). The slowdown in pending home sales (when the parties have agreed on prices and terms of a sale) simply indicates that housing prices are reaching the maximum that the market will bear, as evidenced by less people entering into agreements for high priced homes. Therefore, we can expect to see housing prices decrease in marginal increments until the market balances itself out. It’s important to understand that this is not a crash, but the market correcting itself.

At the Chernov Team we understand that knowledge is power, and knowledge of how market indicators impact the future prosperity of the market itself is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.


Stay Connected

Sign up to Access:

Exclusive private listings S.F. Valley market insights VIP events

Thanks for signing up!
By signing up you agree to our Terms & Conditions

More Blog Posts

To Love
Wednesday June 9, 2021

Southern California, which consists of 6 counties, saw a 20.2% increase in median home prices between April 2020 an...

Read Full Post
Wednesday June 2, 2021

The supply of homes in California is at a record-low level, something we have mentioned consistently over the past ...

Read Full Post
Wednesday May 26, 2021

The news is inundated with stories about buyers who were less-than-thrilled with their new homes, and many of those...

Read Full Post