As the housing market remains sluggish, experts weigh in on the potential for a revival. With key viewing weekends approaching, the market's future hangs in the balance. Despite a temporary uptick expected, long-term growth remains uncertain due to economic factors.
Will the Housing Market Spring Back to Life?
Will the Housing Market Spring Back to Life?
The coming weeks could be crucial in determining the direction of housing prices. Here are the experts' tips for sellers navigating the shaky housing market.
The last two weekends of August are often referred to as viewing weekends, as they typically see the highest demand after the summer lull. Ulrica Hedman, CEO of Fastighetsbyrån, notes that they have more scheduled viewings this year compared to last.
However, the housing market remains sluggish.
– There is still a record-high supply, many sales are taking time, and a significant portion are not being sold.
She highlights the major viewing weekends as an important indicator to see if the housing market can gain momentum this fall. She is particularly interested in the performance of condominiums in the Stockholm area, which have been a particularly slow market recently.
– It's an indicator to see if the summer trend continues or if there is any change. We are perhaps a bit more optimistic that more deals can start happening and that prices may rise slightly, says Ulrica Hedman.
Temporary Awakening
SBAB's chief economist Robert Boije does not believe the housing market will pick up this year, except for a temporary rise in the near future.
– It usually comes to life a bit during August, but we believe it will be a temporary rise, says Robert Boije, adding:
– We don't think the underlying market will awaken.
Robert Boije explains that the housing market has not revived in line with the reduction in the policy rate because it is more affected by long-term interest rates, which have not fallen as much as variable rates. The market is also weighed down by global uncertainty and the erosion of Swedish household incomes due to previous high inflation.
By the end of the year, he expects housing prices to be nearly unchanged for the year as a whole, with the market only coming to life next year.
– By then, real incomes will have increased for two years, and hopefully, global uncertainty will have decreased somewhat. We believe housing prices will start to rise a bit more then.
Sell First
Both experts advise prospective homebuyers to sell their current home before purchasing a new one.
– It takes a little longer, so you need to be patient, says Ulrica Hedman.
– As long as you buy and sell in the same market, and perhaps especially sell first and buy later, you are relatively safe, says Robert Boije.