— As the market recovered from a brutal winter, real estate developers, brokers and investors found themselves scrambling to keep pace with demand in the wake of a historic drop in sales and home prices.
The market was already reeling from a severe drought, and as spring approached, there were concerns that spring sales would slow as investors rushed back into the market.
But while demand dropped for the first time since the depths of the Great Recession, it is unclear whether the winter storms, a new wildfire outbreak and the economic slowdown have had a significant impact on the market, analysts said.
The U.S. market remains highly saturated with demand for the hottest real estate in the nation and is set to continue to be so for some time.
But even as prices have continued to fall, it’s unclear whether they will rebound as rapidly as they did last year.
In the fourth-quarter, U.K.-based real estate company Savills said that its home price index fell by 2.4% year-over-year, compared with a 3.6% drop in the second quarter and a 4.5% decline in the first.
It said that is due to a sharp drop in demand from Europe, Asia and the Middle East.
The fall was primarily driven by a slowdown in China, which fell 1.4%.
While the U.N. has called on China to help ease the pressure on the stock market, the country’s central bank has signaled it may be hesitant to do so.
And China’s foreign exchange reserves have dropped dramatically.
The lack of an immediate impact on prices is a concern for homebuilders, who are also grappling with a downturn in the economy and the impact of wildfires.
Homebuilders, whose sales account for more than half of the economy, are now facing more uncertainty than at any point in recent years.
Home sales are expected to drop for a fifth straight quarter.
“We are experiencing the effects of climate change in the United States, so it’s a challenge to plan for a future that’s uncertain,” said Rob Ritchie, senior vice president of research at the Real Estate Board of Greater Chicago, in a conference call.
“We need to plan accordingly, and we need to be ready to absorb the consequences of climate disruptions.”
Homebuyers, meanwhile, are looking to sell.
In a survey released Wednesday by the National Association of Realtors, homebuyers were asked to estimate the median price of their properties, based on their own experience.
The median was $1.9 million.
For the year, median sales prices in the U.”reached $2.5 million, the median for a single-family home rose 4.6%, and median home values fell 7.4%, according to the NAR.
In contrast, median home prices in California rose only 0.7% year over year.
Home prices are expected in the next few months to reach record levels.
For a first-time buyer in the region, it will take an average of 18 months to sell their home, according to Savills.