Today’s residential real estate markets are absolutely flourishing, and Paul Breunich, President and CEO of Julia B. Fee Sotheby’s International Realty, is here to explain why. Welcome to our video series “Supply and Demand,” in which we explore the current state of the market. In our latest episode, Breunich and host Ana Berry speak about the influence of recent real estate trends on our markets, discussing which of the four historic market stages we are currently experiencing, how economic indicators impact consumer confidence, and the growth we have seen in the markets we serve. We believe that after watching the video viewers will understand Breunich’s optimism not only for the market today but for the foreseeable future as well.
Viewers will learn about the traditional phases of the real estate market cycle, including the initial Peak phase, last experienced from 1997 through 2005. The characteristics of this stage include low inventory levels, high levels of unit sales, and the increasing prices that result from combining low supply with high demand. This stage was followed by a Correction period from 2006 through 2008, with prices remaining stable while inventory increased and sales levels decreased, and then a Trough period from 2008 through 2011, in which demand was at its lowest and supply reached a high point. Fortunately, increasing unit sales and decreasing supply in the last two years has brought us through the fourth stage, Recovery, and now Breunich believes that we have cycled all the way back to the beginning of the Peak period.
The improvements in housing are largely attributable to healthier consumer confidence, which is itself attributable to a number of factors. These include the Gross Domestic Product being positive since the third quarter of 2009, the historically low mortgage rates, the lowering of unemployment, and the dramatic improvement in the Housing Affordability Index, measuring the financial capability of consumers to buy a home. Each one of these indicators has assisted in the recovery and drawn purchasers back to the market. In the areas where we operate, the results year to date speak for themselves. Closings as well as pending sales, including under contract listings that have almost closed, have significantly improved year over year. Please check out our video to learn more about supply and demand in the market today.