Written April 14, 2022
The real estate market can feel overwhelming trying to follow what is going on. (Having a realtor helps with that 😉 ) I’m here to help bring you up to date! Three major things have happened over the last couple weeks in the real estate market.
- Interest rates have increased for a second time this year
- They raised it by a half percentage point, which is the first time in decades they have done this.
- It has not been increased this much since May 2000.
- They claim the purpose of this raise is to help curb the growing inflation
- Be prepared for more rate hikes throughout the rest of the year.
- Typically, mortgage rate increases happen in quarter percent increments. This half percent increase is an aggressive move, with more to come.
- Inventory of homes on the market has increased
- The number of homes being listed on MLS increased in March more than 3 times from the number of listings in December. And, we are on track to meet or exceed the same number of listings on the market again in April. (Take a peek at the chart below.)
- This has resulted in less demand from the buyers, as there are now more options for them to choose from.
- Competition has decreased slightly with the inventory growth.
- We were coming from a scorching hot market, which means we are still in a sellers market. The sellers market just isn’t as intense as it once was.
- We are still seeing homes getting multiple offers. But, we are also seeing some homes stay on the market longer than 14 days, which was unheard of only a month ago.
- In the past few months, we were selling the same number of homes as were being listed each week. Now, we have inventory left, selling 2/3rds to 3/4s of the homes on the market each week.
- Sale price is slightly decreasing
- The average sale price of all homes has decreased 4.6% compared to February 2022.
- Average sale price is still up 25.5% from March 2021, even with the decrease between February and March.
- The two factors above contribute to the lower sale prices of homes.
- Plainly put, homes just aren’t selling for the same amount that they would have last month.
- Many homes are still being priced competitively low and holding offers.
- If they don’t get any offers you may see realtors and sellers taking a couple different approaches. 1. Raising the price to market value/what the sellers want and taking offers any time. 2. pricing it even lower to drive up more showings and increasing visibility.
(If you have any questions about the real estate market, let me know! I’m also up for a chat about all things real estate. 😊)