Q3 Market Update-Low Inventory Keeps Pricing High

We continue to have a decrease in the volume of sales in the single family home market. However, sales volume have increased in the condo and townhome market. There are a couple of things to take away from this.

First, everyone is discussing affordability. With rates in the 7’s, that has drastically changed the purchasing power for a lot of buyers. However, for buyers that are all cash, they have far fewer competitors because in a lot of circumstances, the higher rates have eliminated their competition. This is most common in the 3 million and above price point.

Would be buyers in the single family home market have been pushed to the condo and townhome market. This has increased the volume of sales in that marketplace on top of an overall higher rate of inventory in that marketplace.

We also have what makes this market feel a little like the upside down: such low inventory has kept pricing high. In a lot of circumstances, we are missing inventory that would drive pricing down in correlation with the decreased demand. However, we still don’t have that inventory.

What does this mean for our future? Winter is generally the slowest time of year for real estate. We expect things to be business as usual and or with emphasis not on real estate. However, we very well could be coming into the first quarter and or spring with some of the lowest inventory historically. Without an influx of inventory and rates unchanged, it might not be the wild, wild west of a market that we have had with 20% year over year growth. However, there is no justification for pricing to soften. Now, it’s not to say that opportunities won’t become available. They might just take a little more digging than they have in the past.