And it seems to be spinning by with dizzying speed!
I hope you enjoyed your start to Summer with some relaxing time at the beach, lake or where ever your happy place may be!
This Real Estate Market is becoming one that is hard to predict and get a good feel. Mainly, because the rates seem to just be stubborn and sticking to the high 6s and low 7s, where many industry insiders expected the rates to drop with the rate of inflation...though that does not seem to be the case.
We are still experiencing low inventory, mainly due to the fact no seller wants to really move! Or so that seems to be the case. The lower inventory though is keeping pressure on the pricing of homes even with the higher interest rates. Some areas as we get micro are not experiencing the inventory shortage, though on a whole it is about 60% less of the homes we typically have on the market at any given time. (using between 2014-2019)
Rates seem to be stubborn as I mentioned before, though the moment they do seem to go down and if they get below 6% we may see another fury of buying. There are a TON of people who are taking their time at the moment, not because of the choices available, though because of the COST of the choices and they are making sure they make sense for them.
To the Update!
The average sales price in June was $580 which was Down from last June by .3%. Nothing to make of this to be honest, other then pricing seems stable and hanging in there with these higher interest rates. We do not have enough inventory to slow this down as well. With less choices, home owners are just not budging as much on prices, it shows the same with the average listing to sales price as it climbed up.
Average Days on Market:
Our Average Days on Market for a home are at 29 days, which is up 107% from June last year. Though as you can see from the graph, it has been steadily declining since January of this year. The lack of listings does not help this by any means. With the days on market tightening, the buyers are forced to make a decision before another buyer does so! I am still seeing homes(all price points) have multiple or first day offers on some homes and others go a few weeks!
Average Months of Inventory:
We are now sitting on 1.6 months of inventory, which is up 6.7 from last June. We are finally catching up to the inventory increase of last Summer, though I am expecting it to continue to remain at this level. Really hard to tell how fall will look, typically the inventory starts to go down as we approach October, though last year we rode interest spike wave all the way into the new year! Just know, this is still extremely seller favored.
New Listings on the Market:
In June, we saw 1,968 new listings hit the market which was down 23.4% from last June. Again, this is what helps keep the prices so high and stable. We are almost down 25% each month in new listings and there is nothing that shows this trend wont continue. Local sellers are just not willing to trade their home, regardless of equity, unless the have to. Again, as we head closer to fall we typically see less and less homes hit the market.
Homes Under Contract:
June saw 1,704 homes that went pending which was Down only 1.7% from this time last year. I keep saying this if the rates were lower, it would be bonkers. This is why. Even with todays rates we are not experiencing the sharp drop in sales the media has mentioned! Our market is still strong, due to a lot of out of town buyers. If you are interested to see the pending homes around different price points, that shows another story though its too much for this update! (shoot me an email ill break it down if interested)
Closed Homes:
In June, we saw 1,767 homes go to the closing table which was down 13.6% since last year. So our Closed homes has increased, lot of the new construction contracts from Winter/Spring are coming into completion so I expect the closings to remain fairly high for the next few months, you will also notice they may exceed the contracts written for the month or month prior as well! Still a strong indicator for our market that it may be down from the peak of all peaks, its not crashing as the news would have made you to believe.
So, what does this all mean?!
It means a few things, at least for the moment, that pricing is still stable, interest rates are staying stable and inventory is remaining low.
That being said, we are seeing pockets of town have longer days on market etc... Though it depends a lot on price point, location etc... though over all our market is still extremely healthy. Homes may take a little longer to sell than the pervious last 2 years, though prior to 2020 they took nearly 2 months.
I believe that is what is hard for people to get used to, getting back to "normal" when it comes to expectations. We all got caught up, Buyers and Sellers, in the frenzy of the past few years. The market really went crazy with the abundance of offers over asking on day 1 that now when we get a 98% of list price offer in the first week we scoff!
It truly is getting back to a normal, though everything about the numbers is abnormal, homes for sale, day on market, pricing... though it takes time to sell a home again, it takes good pricing to attract the buyers, just because the inventory is low making up a higher number is no longer a listing strategy that is going to work due to lack of competition. Buyers are watching the numbers closely this time.
If you were someone trying to time the market... the graph below is the median sales price from the listing price in our MLS. Hard part of timing something is you never know your past the peak or bottom until you climbed over or out of it... When someone asks when was the best time to negotiate on a home, I would have said fall/winter of 2022...
Until then,
Onward
