{"id":9052,"date":"2019-02-22T13:19:49","date_gmt":"2019-02-22T21:19:49","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=9052"},"modified":"2026-03-26T07:42:09","modified_gmt":"2026-03-26T14:42:09","slug":"real-estate-market-slowing","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/real-estate-market-slowing\/","title":{"rendered":"5 Signs of Real Estate Market Slowing and How to React Rationally"},"content":{"rendered":"

\u201cWhen a real estate market slows, it takes longer and longer to sell a home,\u201d explains Barbara Dopp<\/a>, whose team ranks as one of the top 10 in production out of over 4,000 agents in the Boise, Idaho<\/a> area. \u201cAnd the longer a home is on the market, the less it’s going to sell for.\u201d<\/p>\n

Sounds simple in theory, but what are the signs of a real estate market slowing? It\u2019s not like you\u2019ll get a memo in the mail warning you about it. Even experts who watch the markets for a living have a hard time reading the real estate tea leaves<\/a>.<\/p>\n

But a little knowledge goes a long way if you want to get a handle on the future of your largest financial asset. So put your economist hat on and get ready to study these market indications<\/a> of a cool down\u2014then, adjust your home sale plans proactively.<\/p>\n

Crash, recovery, expansion: Understand real estate cycle basics<\/h2>\n

The highs and lows of the U.S. residential real estate market are traditionally cyclical. There\u2019s a distinct 17 to 18-year pattern<\/a> after a housing crash of recovery, expansion, oversupply of vacant homes, and recession.<\/p>\n

\"A<\/a>
Source: (Harvard.edu<\/a>)<\/figcaption><\/figure>\n

This cycle has been relatively consistent\u2014since as early as 1800\u2014with only two notable exceptions: WWII and the double-digit interest rate hike of 1979.<\/p>\n

Since the most recent housing market crash happened in 2008<\/a>, if the current cycle follows this same pattern, we won\u2019t see the real estate market peak until 2024. So a true recession and housing market slowdown shouldn\u2019t happen until 2025 or 26.<\/p>\n

However, just because \u201cthe big one\u201d may still be years away, that doesn\u2019t guarantee a steady upward trajectory in residential real estate demand, inventory, or home values.<\/p>\n

It\u2019s natural for any economic market, including housing, to see market corrections<\/a> that shift trends from a seller’s market to a buyer’s market<\/a> multiple times throughout a single year, let alone an 18-year cycle. While these may be mere blips on the overall trajectory of national real estate trends, they can still have a devastating impact on your home sale.<\/p>\n

\"\"<\/a>
Source: (PublicCo\/ Pixabay)<\/figcaption><\/figure>\n

5 Signs of a Slowing Real Estate Market<\/h2>\n

It\u2019s helpful to group the array data that goes into reading the housing market into five distinct buckets:<\/p>\n

    \n
  • Home inventory levels<\/li>\n
  • Days on market<\/li>\n
  • Home price movement<\/li>\n
  • Number of price reductions<\/li>\n
  • Mortgage interest rates<\/li>\n<\/ul>\n

    Let\u2019s dig deeper into each one of these factors and how to tell if conditions at any one time are showing evidence of a slowdown.<\/p>\n

    1. Rising home inventory levels<\/h3>\n

    In real estate, months of supply<\/a> is how agents refer to inventory\u2014by how many months it would take for the current number of available homes to sell.<\/p>\n

    This is determined by looking at the average number of homes listed for sale each month and how many properties actually sell each month.<\/p>\n

    For example, if your area has an average of 60 homes listed for sale each month\u2014and an average of 10 homes sell each month\u2014your market has a 6-month supply of inventory or 6 months of supply.<\/p>\n

    According to the experts, markets at 6 months of supply are considered balanced. Markets with less than a 6-month supply are seller\u2019s markets, because there are more buyers and fewer homes for sale.<\/p>\n

    Markets with more than a 6-month supply are buyer\u2019s markets because there are more homes for sale, but fewer buyers.<\/p>\n

    \n

    Unsold inventory is at a 3.7-month supply at the current sales pace, down from 3.9 last month & up from 3.2 months a yr ago #NAREHS<\/a> pic.twitter.com\/nJVI18KnHR<\/a><\/p>\n

    — NAR Research (@NAR_Research) January 22, 2019<\/a><\/p><\/blockquote>\n