Investors Split on Current State of Housing Market

This week’s Sentiment Survey special question asked AAII members how they perceive the current state of the housing market. The results were mixed and demonstrate how drastically different the housing market is in different parts of the country. About 27% of respondents state that the housing market is currently overvalued, particularly in areas like the San Francisco Bay area, Seattle and Denver. On the other hand, a similar proportion of respondents (25%) say that the market is stable from both a buyer and seller point of view. Current low interest rates were named as a driving factor for expected growth by 19% of respondents, while 12% say that they believe the housing market is beginning to slow down. Finally, 16% believe that there is an inadequate supply of affordable housing for the middle class in their area.

Here is a sampling of the responses: 

• “American businesses are strong, and unemployment is low. We have more upside potential. Prices will move up in the housing market, as long as mortgage interest rates are still low.”
• “Out of sync with demand. Lots of high end, but not much middle-to-low end. This may change after the fire season in California.”
• “Neutral in Florida. No change in the past 10 years.”
• “Housing sector is getting weaker. I see more promotions and homes sitting on the market longer. It may even be a bit over-built in the Pacific Northwest region.”
• “In my area, the market is overpriced because of a lack of homes for sale.”

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