Gary Keller, Founder and Chairman of Keller Williams Realty International, addressed over 10,000 Realtors at their annual conference: “Winter is coming. You need to go home from this convention and prepare. The shift is coming. It is. We have been in this recovery stage for 6 years. A standard cycle is 7 years for an up shift or down shift. It is coming….”
The 5 indicators of a downturn in the real estate market according to the book “The Shift” by Gary Keller:
1) Days on the market are up-In Massachusetts we saw multiple offer situations as soon as the homes hit the mls listings. The fall market is not seeing the same demand.
2) Supply of “move-up” and higher end housing is growing-This is the majority of single family new home construction in MA.
3) Home prices are going down in some markets
4) Unit sales are slowing
5) Construction is flat
6) Median home price is higher than its ever been in history-In August 2016, the median home price (MAR statistics) in Massachusetts reached $375,000. That is up 2.7% from last year and back to 2007 median home price level before the 2008 market crash.
In Massachusetts we are seeing the signs listed above. In 2008, Lehman Brothers went bankrupt. In 2016, Deutsche Bank has been fined 14 billion dollars by the US Department of Justice for the part they played in the 2008 mortgage crisis. They employee over 100,000 people in 70 different countries. The signs are there and it is time to prepare.