May 2023 Market Update

 

Fannie Mae Chief Economist recently stated “the fact that prices rose slightly in Q1 is evidence of a significant pent up mortgage demand, despite ongoing affordability constraints.” No doubt that rates and continued appreciation have made it more “interesting” when it comes to purchasing. However, this constraint hasn’t stopped buyer traffic meaning continued appreciation as we continue to struggle with inventory in our market. Less options + more demand = higher prices.

 

Despite all of this, nationally, existing home sales jumped 14.5% month-over-month as of the last measure, the first monthly gain in 12 months, and representing the largest monthly increase since July 2020. Locally, we only have data through March which was the beginning of the “uptick” many buyers and sellers have felt over the past 8 weeks. During that time, new listings int he Triangle decreased by 10.9%, under contract sales were down 1.3%. Pricing was a bit soft with median sales price down 2% ($387,000) and days on market ticket up to 36 days (WOW). What does this tell us? The market is all over the place and you need professional help to keep up with what’s going on at the specific property you’re interested in buying or selling. Keep in mind, under contracts at this time were those homes listed in February (yes, it’s confusing) so I am really interested to see April data when it comes out in the next week or so.

 

There have always been three things that sell a home: price, condition, and location – and price can solve the other two. Everyone knows this but the pandemic made people question. You could throw a number out there and likely get it. These days, (due to the data above) not so! The way you price your home in line with past sales and current competition is a direct correlation to your days on market. Studies show after 30 days, buyers start to ask “what’s wrong” with the home, any more than that, you’re going to be dealing with buyers who almost expect a deal.

 

Just because you price a home higher doesn’t mean you’ll get that number….that is, unless your motivation is low to which why are you really selling your home? Days on market are ticking up and some may think that’s because the market is starting to “turn.” Here’s my hot take, agents arent educating their clients on the data and the current market conditions…THAT’S why things are taking longer to sell. You need a professional to help you keep up with what’s going on at the specific property you’re interested in buying or selling…but you’ve heard that before.

 

 

Is it the Spring Market or is it Inventory or is it Rates? The answer: Yes.

 

We saw an uptick in showing activity March 2023 compared to February 2023; however, showing activity was down 11% in the southern region compared to March 2022. Inventory/New listings were much lower compared to last year at an astounding 23% decrease. Yes, less “competition” compared to last year when you look at total number of buyers but more “competition” because more buyers per home.

 

Loan applications are down almost 25% compared to last year (which likely explains the influx in lenders wanting to take us agents to coffee…hmmmm) but up 5% week over week consistently the past couple of weeks. As you know, showings and purchases follow loan apps. A hint at what’s coming.

 

So what does this mean? You need a professional to help you keep up with what’s going on at the specific property you’re interested in buying or selling…you see where I am going here?

 

 

Seriously, it’s annoying. Recession doesn’t equal housing crisis, this isn’t 2008 (those of you who’ve gotten a loan recently know that they need pretty much everything about you except a blood sample). If you want more info on “Higher Credit Score means Higher Payments” head to the blog post from Bill referenced in the May email. Here’s what I do know, according to Zonda, 53% of millennials are still renting because they are “waiting for home prices to come down.” Don’t be “that guy.” The data (not the headlines) show that home prices appear to have bottomed out and are on the rise again. It indicates that prices will continue to rise (albeit at more “normal” levels).

 

That’s not every home, don’t go buying a lemon. Use your resources and professionals to help you make smart, educated investments whether it’s for that purpose or for your personal home. You need a professional to help you keep up with what’s going on at the specific property you’re interested in buying or selling.

 

How can we help? Shoot me a note at [email protected]