| Ok friends, here we go. We are, perhaps, seeing some real softening finally. August is usually slower than June and July so we will see if this is just the seasonality but I don’t think it is. I think we are seeing activity and sentiment set in that has been a long time coming. I do think we are also seeing some immediate apathy that is fueled by some hope that rates are going to drop soon. It seems to be pervasive thought right now. New listings are down almost 26% in a 30 day window. I think this is very much seasonal. School started back and people stay still. It will be interesting to see if this picks up, especially in October and November when people try to sneak in a sale between semesters. New Under Contracts are basically flat Active inventory is basically flat Under contracts is up slightly and that correlates to the long time on contract to close. It shows as down over the last 30 days but the actual number is pretty big–compared to what I think is historically closer to 30 days. May of ’21, list to contract average was 17 days. Closings are down 12% All measures of pricing are down a decent amount for a 30 day window. It is possible that the majority of properties selling were lower priced properties but looking at average list price dropping, it says that people have been dropping price to try to make one push before the selling season ends. Finally, months of supply is up. This is a function of a longer listing window and drop in overall activity. What we have is normalization. We are looking at the “soft landing” the Fed talked about a few years ago. It is pain, prolonged, dull pain. It is the opposite of ripping off the bandaid. We will continue to see prices coast downward and days on market drag out and months of supply increase until we see real changes in interest rates. This is great news for buyers and not as great news for sellers. But, sellers will still sell. Buyers will still buy. Just at a much slower pace than 5 years ago, or even 2 years ago. I don’t think we see a massive drop in prices. Supply is retracting as much as demand. The one sector that should be worried a bit is new construction as they have more exposure. A bigger builder might have multiple homes sitting and have a number they have to hit. In a softening market, that becomes harder to predict and each sale kinda spells out the fate of the next sale in the neighborhood. An individual can just choose not to sell. |
