Hot summer, hot market.
It’s hot, there aren’t a lot of homes available (some even without air conditioning), and buyers are frustrated. Sellers are continuing to make the rules and buyers are getting left out in the heat. Sound familiar?
Home prices are breaking records and would-be sellers are more worried about their replacement purchase than selling their current home. So, they opt to wait it out. The result: no inventory, increasing home prices, and homes continuing to fly off the shelf.
Inventory, yep I said it again
A quick glance at this chart doesn’t reveal much. From 2016 to 2017 the inventory numbers ticked down from 1.5 to 1.4 month. Not a huge surprise if you’ve recently been shopping for a home (you already know there aren’t many options out there). What caught my eye were June’s inventory numbers compared to 2016. The active (available) number of homes for sale in June 2017 compared to June 2016 was down 7.3% while the number of sold homes for the same time period went up 3.7%. That equates to 1.3 months of inventory for June which is putting pressure on our 1.4 month average for 2017. No surprise this is pushing median sale prices to record highs.
Median sale prices not letting up
The median sale price has continued to climb to record highs building on the $400k foundation laid in 2016. Unless something changes in the supply and demand department this number will continue to climb.
Going, going, gone.
Our valleys are getting deeper. Homes are selling an average of two days faster, down to 17 days on the market. If inventory numbers continue to stay low and buyer demand increases this won’t be our bottom.
Interest rates bottoming out?
June also saw 30-year interest rates dipping below 4.05% for the first time in 2017. Keep an eye on rates increasing slightly over the next month or two and how that slows buyer demand (if it does at all). The Fed has indicated it will slow future interest rate hikes to prevent inflation, this should slow (or reverse) the current increasing interest rate trend.