The real estate market is positively thriving, and William Pitt Sotheby’s International Realty President and CEO Paul Breunich is here to tell us why. We invite you to check out the latest episode of our “Supply and Demand” video series, in which Breunich sits down with host Ana Berry to discuss how recent trends in real estate are impacting the market. In the video, you will learn about the four traditional phases of the market, how consumer confidence has been shaped by economic indicators, and the specific improvements we are seeing in the local markets where we operate. Viewers are sure to come away sharing Breunich’s optimism not only for the current state of the market, but for where we are headed for the foreseeable future.
According to Breunich, the market has cycled through the four historic phases and has now returned to the initial Peak stage, last seen in the years 1997 to 2005. During this phase, increasing unit sales illustrate high demand, but inventory supply lies at low levels, which has the effect of driving prices upward. Our most recent Peak period transitioned into a Correction period from 2006 to 2008, with decreasing sales causing inventory to increase while prices remained unaffected, and then into a Trough period from 2008 to 2011, with supply at its highest and demand at a low point. The last two years have shown all the hallmarks of stage four, the Recovery period, with supply shrinking and unit sales rising, and now we are poised to reenter the Peak period.
Breunich explains the various factors that have contributed to improving consumer confidence. The Gross Domestic Product has been positive since mid 2009, unemployment levels are steadily decreasing, mortgage rates remain at historic lows, and the Housing Affordability Index, which measures consumers’ financial ability to make a home purchase, has demonstrated dramatic growth. All of these indicators have helped in the recovery and inspired buyers to jump back into the market. In the markets we serve, the year to date results drive home this point. In all of our local markets, year over year closings and pending sales, which include properties that are under contract and have nearly closed, have significantly increased. To learn more about supply and demand in the current real estate market, please enjoy our latest video.