It’s happening folks, right before our eyes. The market is changing, umm, cooling. But before we go there, we’ll report on April’s sales numbers:
- Active Listings: 6,688 versus 5,080 last year – up 31.7% – and up 32.4% from 5,051 last month
- Under Contract Listings: 10,889 versus 12,187 last year – down 10.7% – and down 6.3% from 11,620 last month
- Monthly Sales: 9,270 versus 10,200 last year – down 9.1% – and down 8.6% from 10,144 last month
- Monthly Average Sales Price per Sq. Ft.: $302.64 versus $243.36 last year – up 24.4% – and up 4.1% from $290.75 last month
- Monthly Median Sales Price: $466,000 vs $373,000 last year – up 24.9% – and up 2.3% from $456,000 last month
As you can see, the numbers continue to change favoring buyers. Listings are up over 32% in just the last month. Under contract listings are down compared to last year AND last month. Sales are down 9% from last year, and almost 9% since last month. And in one of the few owner bright spots, sales prices, the lagging indicators, are up 24% versus last year, and, get this, over 4% from just last month.
For a few more months perhaps, we will continue to read of increasing sales prices, as sales are closing higher due to existing pending sales in the past weeks. But soon enough, if the current trend continues (and it will), inventory will continue to increase providing buyers with many more choices and less competition. Alas, we could well be on our way to a more normal market – a novel Phoenician thought, for sure.
But soon enough, if the current trend continues (and it will), inventory will continue to increase providing buyers with many more choices and less competition.
But then there are the investors. What’s up their sleeves?
Real estate investors can be pretty savvy. The successful ones understand market dynamics. They know “when to hold em, and when to fold em.” Today’s large scale investors, like the huge behemoths in the stock market, can often determine (manipulate?) direction for an entire market.
Since mortgage rates have escalated to over 5.5% recently, the regular mom and pop market, including first time homebuyers and move-up homebuyers, is slowing.
So, how are investors reacting to the market? Or asked another way, what should a shrewd investor be looking to do?
The current Phoenician investor, in my opinion, unlike stock market sellers, will be pulling back on purchases, but not liquidation. If buyers aren’t buying, they’re renting. The rental market will not be slowing until (if and when) new home construction, apartments, etc catches up to the demand. This could then further slow the sales market. Investors will wait and only look for the best buys that are out there – and they could have plenty to choose from.