I trust you had a great Summer as we did! We were able to enjoy late evenings watching the girls swim at their swim meets as well as a few quick trips up to the Lake to visit the in-laws!
Aside from the real estate market, it was a "normal" summer for our household!
Now Real Estate, that has been interesting. With the interest rates just hovering in the 7s this summer has put a damper on some sales in our market. The report below is interesting, though without context could be confusing!
We are seeing less listings hitting the market, this is due to the fact that it is just too "expensive" to leave their lower mortgage and trade for a new home. Most sellers, not all, though most are MUST need sellers due to life circumstances such as empty nesters, growing families that need more room or job transfers due to jobs being called back to the office!
When it comes to Resale homes versus New Construction homes, we are seeing some interesting trends. One the New Construction homes are offering lower interest rates, some footing 4.9% and others 5.25% and 5.5%! That is driving buyer traffic to their homes and taking away from the resale homes.
Resale contracts are down(last 12 months) 27.6% while New Construction Contracts are up(last 12 months) 13.9%.
To the Update!
The average sales price in July was $571,169 which was Up from last July by 2.5%. It seems regardless of where rates are, the pricing seems to be holding strong. With the lack of new listings coming on the market and the builders giving incentives to buyers, aside from price drops, it seems that this trend may continue on.
Average Days on Market:
Our Average Days on Market for a home are at 27 days, which is up 92.9% from July last year. We are watching a weird graph. The peak on Days on Market come from the winter and the push in activity we had at the beginning of the year and seemed to be finding a balance here as summer comes to an end. I think we may see the same thing start happening as fall approaches as last year, just not sure if we see the decrease so drastically.
Average Months of Inventory:
We are now sitting on 1.6 months of inventory, which is Down 5.9% from last July. Lack of new listings will lead to a low inventory market for now. It seems we have been just skipping along this number the past few months. I do not see this rising too much this fall just due to the lack of sellers in our peak season. If we continue to see the 15-20% of less listings each month from year prior, we may head lower in inventory.
New Listings on the Market:
In July, we saw 1,792 new listings hit the market which was down 18.4% from last July. Still seeing the decline in motivated sellers. Again, unless there is a major life event happening there is not too much excitement to sell a house. We are at some of the peak selling prices, which should drive people to unload their homes and take advantage of the equity, though it is hard to give up a interest rate most likely below 4.5%
Homes Under Contract:
July saw 1,609 homes that went pending which was Up only 7.8% from this time last year. This was good to see, we are still putting homes under contract in the area despite all the rate talk! There are motivated buyers out there, they are taking a bit longer to commit in certain price points, though people always need shelter! Even with the rates and the cost of a home, it truly is better to own over renting!
Closed Homes:
In July, we saw 1,369 homes go to the closing table which was down 19.8% since last year. So this was the lowest number I have seen in July since 2014! This is the trend that we do not want to continue to see. Written contracts show that there are buyers in the market, closed homes show that the sale actually went through! There has been a lot of fall through the past year, I have experienced buyer cold feet, due diligence periods and financing falling through.
So, what does this all mean?!
Sales are still happening and its feeling like a "normal" market, meaning homes typically do not sell in one day. You typically do not have 14 showings in the first 48 hours. Prices don't skyrocket 35% in 2 years.
That being said, its still a healthy market, healthy hesitation from a buyers perspective and with low inventory sellers can sit on their home at a higher price until the right buyer pops up.
If we see a dip in rates, which I don't think we will until 2nd quarter next year, we could see some heavier buyer activity for those on the sidelines.
If you have to sell, still a good time! If you have to buy, still not bad even with rates, my first home was a 6.75% interest rate!
If you have questions and would like to discuss, feel free to reach out!
Until then,
Onward
