Whats Happening With Home Prices?

 Our metro has had increases in both new listings and active listings month after month since Jan, and we now have over 14,000 active listings throughout the greater metro area. Yet both average and median sold prices have gone up month over month since the beginning of the year. That all happening with interest rates staying between 6.6% and 7.22% during that time period. Does it not defy logic? Typically increased inventory will put downward pressure on prices.

On the positive side, the sales to list price ratio is hovering around 98%, which is quite healthy. Also the sales prices losses from the peak of May 2022 are decelerating, so far.

So what comes next? We can look at the activity index (absorption rate) by city, zip and specific neighborhood. As opposed to sold prices (a lagging indicator) the activity index is a leading indicator of where the market may be headed. The index will show us how quickly properties that come on the market go under contract and what the number of months of inventory for each category. Typically, you can correlate a strong activity index over 25% with lower months of inventory, and vice versa.

​Activity Index Zip Code​

Activity Index City​

It also appears based on inventory levels the type of market we are in is heading towards the neutral zone of 5-6.99 months. That should level out the playing field between buyers and sellers.

Our selling season seems to have peaked in March and April this year. Normally May is the peak month for closed sales. As the summer progresses a natural slowdown occurs. Will we see even more available inventory? Will interest rates settle in around the 6.5% range, seemingly a comfortable zone for many buyers. Will we see a small decrease in interest rates that could bring buyers back in earnest? The big question is where will housing prices go...up, down, stay the same? Only time will tell, stay tuned.