I received our 7 county RE market report from Smdra last Monday afternoon after I had already written my newsletter for the 7th. Here are some of the major numbers—
- 4,943 homes and condos exchanged hands at the closing table in July. This is down 3.7% from last July and down 2.8% from 2 years ago.
- We had 5,917 new listings last month, down 2.1% from last July and down 8.2% from 2016.
- This was the FEWEST amount of new listings in July in the last 5 years!
- Buyers placed 5,240 homes and condos under contract last month, an increase of 3.1% from last July and a tiny increase of 0.3% from July 2016.
- We ended July with 7,187 homes and condos for sale, an increase of 0.5% from last year; but down a sizeable 9.1% from July 2016.
- Thus, we have 1.45 months of inventory.
- Of all home types sold last month the average price was $471,441, an increase of 8% from last July.
- Average attached home prices rose faster at 9.1% to an average price in July of $344,823.
- The average price of a detached home last month was $521,473, a 7.8% increase from last year.
- The median price of all home types sold last month was $411,100, an 8.2% increase from last July.
- The median price of an attached home last month was $295k, an increase of 9.3% from last July
- The median price of a detached home was $447k, an increase of 7.7% in the last year.
I also looked at the numbers for July since 2015 with 3 key market stats. First for sold homes and condos, since 2015 the number of sales is down 15.5%; but are only down 2.8% from 2016. Second, is under contracts which have been incredibly consistent the last 4 years as under contracts are only down 1.7% from 2015. Third, is new listings, which are down a big 16.8% since 2015 and this number has dropped the last 4 years in a row from 7,114 in 2015, 6,449 in 2016, 6,045 in 2017, and 5,917 in 2018. Our new listings number is going in the wrong direction!
In essence our market has been the same market for 4 consecutive years! We are STUCK IN A RUT! We have limited inventory, strong demand, and prices keep rising substantially.
What will be the motivating factor(s) that cause our market to get out of this rut? I am reminded by this metaphor I thought of 3 years ago. Supply and demand is like a teeter-totter. On the demand side sits a 400 pound Sumo Wrestler and on the supply side is Kate Moss who weighs 100 pounds. For the market to get back in balance and out of this rut requires the Sumo Wrestler to lose a bunch of weight and for Kate Moss to gain a bunch of weight. Which one is going to happen? Be honest.
This rut keeps getting deeper and deeper every year and thus harder to get out of. In fact, this rut has become a new “trail” instead of just a rut I believe. Is this trail the “new normal”? What will cause our market to go off of trail?
All I can think of are events like another deep recession, massive terrorism attacks, nuclear war, or WWIII. None of them I wish for.