Prices are up again, MoM. With more buyers than sellers, the age-old supply vs. demand still controls the market. Homes under $5M are seeing multiple offers, and a lot of cash offers have returned to the market. We saw a noticeable cooling down in the market starting in July last year. So watch the YoY sale price closely over the next few months, as it’s likely the gap will begin to shrink.
|
Year-over-Year (YoY) |
Month-over-Month (MoM) |
|
|
Homes for sale |
-11% |
+3% |
|
New Listings |
-27% |
+9% |
|
Homes in escrow |
-23% |
+2% |
|
Closed sales |
-25% |
+18% |
|
Median sale price |
-9% |
+3% |
Finally, new listings are up MoM. This is a welcome relief, and let’s hope this continues. Hopefully, potential sellers will realize this and start to seriously consider selling their homes. These potential sellers not wanting to sell because they have nowhere to go, in addition to rates, are the main factors causing the lack of inventory. There was a significant increase in sales MoM, showing again the buyers are back in force and optimistic the worst is behind us despite rates in the 6’s.
Rates
A theory that’s growing momentum with more talk of rates coming down is the fear that buyers sitting on the sidelines will soon re-enter the market when those rates do come down. And it’s doubtful there will be enough inventory to keep up. Some buyers are conscious of this and would rather buy now with rates in the 6’s to secure a home with less competition. Then just refinance into a lower rate 12-18 months from now. Refinance costs about $3k, so it won’t take too long to break even. Of the buyers I’ve written offers for in the past month, every home had 5-10 offers. So if rates drop into the 5’s, it’s fair to say those numbers will increase.
Gallup Poll
A recent Gallup Poll showed only 25% of Americans thought it was a good time to buy a house. However, to put that into perspective, there are 82,000,000 homes in the US, but there are only 563,000 on the market. The average amount of homes for sale in a normal market is 1,500,000. Of that same survey, real estate was considered the best long-term investment.
