Have we “flattened the curve?”
Sorry if that triggered any of you, but we might be seeing some balancing in the real estate market after a rollercoaster ride for the last 3 years.
Last month, I was questioning the sustainability of the drastic increase in Median Sales Price. We rose from $510,000 in January to $575,000 in June. That was almost a 13% gain in value for homeowners in just 5 months. While I never want to see a decline in value, I was relieved to see our Median Sales Price in Reno/Sparks stay almost stagnant last month. Even more importantly, we are basically right where we were last year at this time!
So… have we actually flattened our real estate market curve?!?
The median sales price stagnation is a step in the right direction, but I don’t think we are out of the woods just yet. While the sales price might have stayed flat, we still don’t have the inventory we need. Most homeowners today are sitting on a sub 4% mortgage. If they don’t need to sell, they aren’t. Because of this, we had 10% fewer new listings hit the market last month than in June and almost 30% fewer than a year ago! With only 1.8 months of inventory on the market (meaning it would take less than 2 months to deplete our inventory if we had no new listings hit the market), we are still sitting firmly in a seller’s market.
Interest rates are still hitting buyers right where it counts (the wallet), but temporary rate buy-downs are still very common in the marketplace. Sellers are still somewhat open to giving money toward closing costs in most scenarios. This is helping with buyers’ monthly cost but we still need to see the rates drop.
Important to know moving forward:
If you’re looking to BUY in the next couple months, it’s more important than ever to talk with a mortgage lender before you start looking. With rates in the low 7’s, your buying power may be lower than what you assume. Make sure to talk about the MONTHLY PAYMENT more than the PRICE OF THE HOME. You may be approved to buy a $700,000 house, but surprised at what the payment will be. Please do your homework! Ask me for a list of lenders I trust that will go through this discussion with you.
If you’re looking to SELL in the next few months, understand that it’s more important than ever to price the home correctly. There are a lot of homes sitting on the market for months because the asking price doesn’t reflect the condition of the home. Gone are the days where buyers are going to overlook a 45 page inspection report. Invite me over. I’ll go over the comps with you as well as give you an idea of what needs to be done with the home before listing.
As always, let us know if you need anything at all! The Lewis Group is here to help, just let us know how!