How can a market be both slowing down and glowing at the same time?
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Is the market slowing or growing? I’m often asked that question, and many people tend to think it’s one or the other, but I believe that the market is both growing and slowing. Let’s dive right into the stats:
At 1:26 in the video above, you’ll see a chart that compares inventory to pending sales, which are leading measures of the market. The number of active homes for sale right now is around 2,100 homes, compared to just 1,000 homes for sale back in January. Last month, there were 2,583 new pending escrows compared to the 1,620 in December.
There are two reasons behind this increase in inventory: supply and demand. Supply is a little bit higher because more people are putting their homes on the market to take advantage of increasing home prices. Demand has lessened slightly over the last two months in part because people have been on vacation and enjoying the summer holidays before school starts.
At 2:36, you’ll see a chart that shows how the average price per square foot has changed in the last year. The average price has climbed to $329 compared to last year’s $254. But are home values still going up? Yes, they are! However, they’re not increasing at quite the rates they were; they’ve stabilized at 4% or 5%. Economists believe that they’ll continue to rise throughout the year.
"More options, reduced competition, and low interest rates mean that now is a great time to buy."
A chart at 3:22 shows how the average list-to-sales price ratio has changed over time. On average, sellers are now getting 102% of their list price compared to getting 104% just a couple of months ago. Additionally, the average days on market has increased to 16 days, compared to 12 days last month. Things are taking a little longer to sell, so we’ll keep an eye on this to determine if it becomes a trend.
At 3:57, you’ll see the months of inventory based on closed sales. We currently have 0.9 months of inventory compared to the 0.5 months we had back in March. Keep in mind, a seller’s market is defined by having anything less than six months of inventory.
So what does this mean to buyers? Buyers will find that they have more options and reduced competition, and that, along with low interest rates, means that now is a great time to buy a home.
For sellers, we’re still firmly in a seller’s market. Values are still on the rise, though no one knows quite how long that will last. Low interest rates mean that there is still buyer demand. If your home is priced correctly, you’ll still get multiple offers on it, and you’ll still be able to sell quickly.
So in the end, yes, the market is both growing and slowing. If you have any other questions about the market, don’t hesitate to reach out to us. We’d love to help you.
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