What's Next for Local Area Housing?

Clearly the Feds put the housing market on hold across the nation. And while markets may differ relative to their statistics, demand destruction is evident all around the country. A combination of high home prices and high interest rates are the culprits. We began the year with interest rates around 3%, we're currently at about 6.75. Locally we can compare 2021 with 2022 and note some significant differences. In April of 2021 the sold to list price ratio was 109.51%. Currently it’s 96.47%. We noticed the down turn begin in earnest in April this year. From April through now we've had an 448.4% increase in active listings. This is not due to an abundance of new listings. This is primarily due to the fact that active listings are not going under contract which then add to the existing inventory.

When we look at the current month and year over year, there's a 48.61% drop in pending contracts from Nov 2021 to Nov 2022. That translates into a 47.8% decrease in closed sales year over year to date. That will likely change since we still have another week in November.

What does this all mean moving forward? No one really knows for sure. When the inflation rate recently came in a little lower than expected, interest rates dropped about 60 basis points and activity ticked up a little. However, rates frequently change. What’s important for buyers, sellers and their agents to understand is where we are, now and moving forward. The chart below can help serve as a guide for sellers as to what terms they can expect in the current environment. It can also serve as a guide for buyers to help structure their offers based on the type of market for the city or zip code of the property they desire. Keep in mind that as you look at the different type of market descriptions, that it's hyper-local. Each city in the metro can be in a different type of market, and each zip code within a city can have a different market type.

Believe it or not, there are still properties that are selling over list!