Who has heard the term “shifting market” in the last month or two? Maybe the better question is, how many times have you heard people say that? It is all across the headlines and just about any search related to real estate will have some metric pointing to a changing market. We aren’t here to tell you that it isn’t happening, because it is. We would like to take a few moments and share what we are seeing in our local market and offer guidance on how to be successful as either a buyer or seller. Let’s take a look at the most recent data and see what it can tell us.
Median Home Price
In August, we saw some conflicting data with regard to median home price. If you look at the median price for single family, non-acreage homes, the median price ticked up and is back at near-record levels and sits at $762,000. However, if you take the broader market and include all property types and all property sizes, the median actually ticked down to $700,000. This shows there is still pressure on single family homes in the city, with a little less pressure on larger properties. This is not entirely uncommon, but it is a trend that we are watching to see if it continues to widen. Also, it is worth noting that the average price for single family residential is almost at $950,000, which is a record. When the average is so much higher than the median, it is an indication that there are some very expensive homes that are selling and pulling the average higher, while a larger number of homes are selling closer to the median price. This is another trend that we will continue to monitor to see if there are segments of the market that are more active than others.
New Listings and Pending Sales
We are seeing what we had expected and that is a slowing season for new listings. As we have discussed in previous newsletters, we often see a pattern of increasing new listings from the start of the year until either June or July, with then a drop-off in late summer and into the fall. According to our MLS data, July saw a 30% decline in the number of new listings. This means that buyers have fewer choices and this could be a factor that could keep an upward pressure on prices.
We find it is also important to track what has been happening to these new listings when they come to market. Since the beginning of the year, we have seen a similar pattern of increasing pending sales, however the peak happened in May and has been tapering since. Although this is what we would expect based on yearly patterns, it is worth pointing out that this year, the movement in interest rates could be strong enough to cause future deviations to this trend. June represented the peak in interest rates and it also was the month that showed a large drop off in pending sales. We don’t think this was a coincidence. In July, the drop-off was less significant while interest rates steadied and actually dropped a bit. As we continue into August, we have seen interest rates retreat even further and we will be watching to see if this sparks an uptick in pending sales as buyers try to lock in their rates.
Days on Market (DOM)
With more options to choose from and interest rates (and other economic factors giving some buyers pause) it is not surprising that the days on market increased again. We are now at a median of 10 days on the market and an average of 17 days on the market. This is giving buyers a little more time in homes and even allowing 2nd and 3rd showings in some cases prior to making an offer. These are good things and representative of a much more healthy and sustainable market. We have been tracking the number of active listings over 100 days and this has now crested above 100 listings. At the time of this writing, there were a total of 659 active listings which means that about 15% of the active listings have been on the market for 3.5 months. For perspective, two months ago, only 6.6% of the active listings had been on the market that long.
Average Sale to List Price
With days on market increasing, number of listings increasing and pending sales decreasing, it is not surprising that the average list to sale price is decreasing. With the exception of January where homes sold for 99.9% of asking, July was the first month in exactly two years that the average list to sale ratio was less than 100%. It is worth noting that in pre-pandemic years, the normal range was about 96-98% of list price. However, we like to remind our clients that list price is not the end-all-be-all and really only represents a seller and their broker’s opinion of pricing. Sometimes they are right on, sometimes they are way over and sometimes they are underpriced. Having the strategy of only offering X% below asking, can still lead you to overpay and there are times when offering an amount over asking still represents a good value.
Some other points to consider…
Mortgage Changes: As mentioned above and outlined in the chart below, mortgage rates have stabilized and come off their highs. Experts believe they will continue to tick up but nowhere near the pace we saw earlier this year.
National Projections: Experts are continuing to predict appreciation in the 10% range this year with appreciation dropping to more historical norms of 3-5% in the coming years.
Price Changes: If you have been feeling like you have seen a lot of price changes recently, you are not alone. The number of price changes has increased every month this year. Part of this is lower buyer demand and part is due to unrealistic expectations from sellers. We expect that this will stabilize and we should expect to see this number falling in the coming months.
We hope you find this information valuable and that it helps you towards your ultimate real estate goals. If you have any questions about this month’s content or would like to dive a little deeper on the data, you can always reach me at firstname.lastname@example.org or on my cell at 541-280-2132. Also, keep an eye out for our coming State of the Market report this fall. It is packed with more information and a more comprehensive look at the market as a whole. REGISTER HERE for more information.
There are also several ways to reach the team, so please let us know how we can help.
- Our Facebook page
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- Tetherow Sales Office
- Assembly Office in NorthWest Crossing
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