Residential real estate market outlook: Home prices could begin to fall in the summertime

In fact, the proportion increase in unsold existing homes in comparison with last 12 months is the best for the reason that great financial crisis, he said. BloombergTV on Thursday.

“This will put downward pressure on prices over the next three to six months,” he predicted.

Currently, the housing market continues to be in the standard spring selling season, when Americans typically search for homes to own as families try to search out a brand new place to live before the beginning of the subsequent school 12 months.

According to some reports, this season has been a disappointment to date, as rising home supply meets muted demand from buyers rebelling against high prices.

And because the summer selling season ends and fall arrives, Nick says, home prices will begin to fall, undermining consumer confidence. While high prices have demoralized potential buyers, they, together with the strong job market, have lifted the spirits among the many owners of those homes.

“As soon as they see housing prices fall — maybe the house next door becomes a little cheaper than it has been in recent years — that will affect their purchasing power and willingness to buy,” he warned. “The housing market is really the first domino to fall on what we believe is a slower growth story.”

Other observers of the true estate market also pointed to a shift: More and more buyers are resisting the high real estate prices demanded by sellers.

Compass co-founder and CEO Robert Reffkin said CNBC Last month it was announced that 30% of inventory available on the market had seen a price drop, essentially the most within the last decade, while supply had increased by 16%.

“It’s a different environment. We see more sellers than buyers now,” he said.

But that weakness continues to be masked by national numbers showing rising home prices. The latest S&P CoreLogic Case-Shiller index showed prices rose 6.5% year-on-year in March, hitting a brand new all-time high. Data from Redfin showed that they rose by 7.3% in April in comparison with the previous 12 months.

Nick of the Macro Institute, for his part, identified that the variety of homes on the market is currently increasing by 8 to 10 percent annually, which suggests that prices will soon fall.

“The imbalance between supply and demand is beginning to correct itself, which could mean prices will fall as early as this summer,” he said.