August Mid Month Market Update

Our market is demonstrating slowing demand and increasing inventory. Our days on market is increasing and for the first time in a long time, buyers are able to negotiate and homes are selling for 97% of their list price.

I think many people have a tendency to look for signs of a slip in our market. However, it appears that we are adjusting to a more normal territory. Buyers can expect to negotiate. There aren’t multiple offers within the first several days. A fair market is described as 6 months of supply. As of right now, we’re currently at just over 4 months. This would indicate that it’s still a seller’s market. However, I think our baseline as a result of COVID is so far out of whack that normal seems inappropriately slow. It’s like part of a conversation I had today: “rather than going from 30 miles per hour to 20 miles per hour, it’s like we’re going from 70 miles per hour to 50 miles per hour”. We’re definitely moving forward, we’re just slowing our acceleration.

I think the important note is that the Fed has the ability to decrease rates if they feel it’s appropriate in order to stimulate the economy. Last week there was definitely concern related to the Sahm Rule being triggered. However, how do we put that in context of record low unemployment for such a lengthy period of time. Even with where unemployment is now, we’re still below our historical average. Unemployment

If we have approached a more fair market and we can’t anticipate ferocious nominal price growth, our affordability will likely increase as rates come down. In general I anticipate that the volume of transactions will begin to increase as more people begin to decide that another home would be a better fit. Better than their low interest rate. It may take a quiet winter, but housing has always been resilient and I don’t suspect that will change as people will always need a place to live.