It is clear by now that a real estate market shift has taken place. We have just come out of a frenzied seller's market where on average, 90% of properties sold above the list price, which lasted up until mid-April. What precipitated this market shift? First, the announcement of the Fair Housing Plan spooked buyers into the sidelines; secondly and more importantly, the supply of available houses for sale increased substantially after mid-April, giving buyers more choice eliminating the urgency to buy immediately.
As is obvious from the below graph, the ratio of sales to new listings was more ideal for sellers to get top dollar from mid-January to mid-April (mostly under 2.0). After that, a flood of houses came on the market delivering lower sale prices.
It is also obvious from the above graph that new listings on the market were down substantially in the latter part of June. This may have resulted because people realized they can no longer get the high prices the market delivered earlier in the year and they may try selling their houses in the fall market. The question on everyone's mind is "What will the market deliver in September?” This will depend on the supply of houses for sale. If supply is high, then prices will soften further. But if supply is low, the market will rebound because buyers have not disappeared - they have just taken a wait and see approach.