Over the last several months, there’s been a “shift” across the nation in real estate. What does that mean? Basically, the market is starting to move from a super-hot “sellers’ market” to a market that has more balance.
This shift is showing in several ways:
- Inventory, which has been incredibly low for the last several years, is starting to open up. In Ponte Vedra, the months’ supply of inventory rose year-over-year; however, inventory is still very tight. For example, in our area, we went from one month to almost two months of inventory. Remember a “balanced” market has 6 months of inventory available. According to National Mortgage News, nationally we have a shortage of more than 700,000 listings, so we expect to have low levels of inventory for the foreseeable future.
- In our area, the number of closed sales and pending sales are down when compared to last year. Lack of inventory accounts for much of this slow down as does the increase in mortgage interest rates.
- In the second quarter of 2022, the jump in interest rates caused some buyers to step away from the home buying process. Buyers who were financing their home purchases had less purchasing power with higher rates. In the beginning of Q3, interest rates dropped significantly. For the remainder of the year, we expect volatility in the interest rates.
- The average days on the market has seen an uptick, especially at higher price points. Here in Ponte Vedra, the average days on the market is up from last year…but is still an average of only 20 days.
Home prices are staying strong but the RATE of appreciation for homes is beginning to slow down. Nationwide prices hit yet another high in June for the 31st consecutive month, but there are some price pullbacks (National Mortgage News).
In general, we expect prices to continue to rise, although more moderately. Record low inventories, dramatic slowdown in new home construction, and significant unmet need for housing all point to higher, not lower, prices. This situation is anticipated to last at least another year - so, if you're a buyer, sitting on the sideline most likely will not be a good strategy, and, in fact, may cost you.
What does all this mean?
Well, if you’re a buyer, it’s likely you’ll still pay market value for your next home — but you may have a little more time to make a decision than you would have last year. Make sure you have your pre-approval letter ready and be sure your agent is armed with information about recent sales. We’re still seeing multiple offers, especially for homes that are new or have been updated, so be ready to submit your best offer.
And, if you’re a seller, the news is still good. Home values are strong — but pricing your house “aspirationally” is probably not a good decision right now. We’re finding most buyers are looking for a move-in ready home so any repairs or updates you can make before putting the house on the market will be important to differentiate your property from others on the market.
We will continue to watch the market data closely and be ready to make adjustments to our recommendations going forward. Our team is committed to making sure we have the most up-to-date information available to help you make smart decisions about buying or selling properties. Let us know how we can help!