Since June 2020 when our RE market “re-opened” after COVID shutdowns we have had 1 month of inventory or less of homes for sale. For the last 23 months we have averaged 0.57 months of inventory. What has happened to median sold home prices (attached and detached)?
· Median sold prices are up on average 14.8% year over year since June 2020.
· We have only had 6 months of single digit price increases with 5 of them in 2020 and the last one being January 2021.
· We have had 5 months of price increases > 20% year over year.
· Since February 2021 our 3 lowest price increases have been 11.3% in February 2021, 13.3% in March 2021, and 13% in October 2021.
This history tells me that price increases will NOT SLOW DOWN TO < 10% until inventory doubles to at least 1 month. Thus waiting to buy a home makes no sense and remember you can refinance your mortgage to a lower rate, but you can’t “refinance” the price you paid for your home later.
· Great to see active listings increase by 85% from March to April. I hope this number wasn’t a one-month aberration and this number continues to increase so that MOI gets to > 1 so that price increases can slow down into the single digits.
· Good to see new listings up for 2 consecutive months. Hopefully this trend will continue.
· Amazing to see 87.75% of pendings closing this year which is far above average.
· Demand is incredibly strong when you consider sales are the second highest year to date in the last 5 years. This is shocking to me with mortgage rates up over 2% this year and prices up nearly 20%.
· Is this FOMO or Fear of Missing Out or just simple organic demand? My younger move-up buyers all NEED a bigger home and/or yard as they start families. I personally have not sensed any FEAR from my clients about missing out. Have you?
· Pendings had dropped year over year for 4 consecutive months until April with a small 2% increase. This surprised me as I thought pendings would continue to drop year over year. Maybe soaring rates and prices are NOT scaring away buyers. Will this translate to an increase in Solds in May?
· The number of solds year over year have now dropped for 4 consecutive months by an average of 9.9%.
· I believe we will see the number of sales continue to drop monthly by roughly 10% year over year and we will probably end the year with about 55k home sales instead of the 59k plus of the last 2 years.
· Fewer sales should cause inventory levels to rise as well. I hope we can get back to > 1 month of inventory which we haven’t seen since May 2020.
· Good to see the median sold price increase dropped below 20% at 18.6%.
· We have seen double digit median sold price increases year over year since last February or for 15 consecutive months.
I am saving 2 more data sets for next week’s newsletter that you will find intriguing and valuable too.