Monday Market Minute – A Shift of Perspective
As we head into the fourth quarter of 2023, there can be no doubt that the real estate market has shifted. Are things quieter out there in the “wild world of real estate”? You bet it is. Is this a sign that signals loss of home values? Not by a long shot. Here are some high-level data points to support this statement:
· At the end of September home prices were up 6% from last year (not double-digit growth but pretty darn respectable)
· Half the homes are going under contract in 3 weeks
· 37% of homes that went under contract received offers 2% - 3% over asking price
· While supply has increased in 2023, we still only have 32% of what we need for a market in balance (7000 homes versus 21,000 homes)
What most of us hear in the media though is the following:
· The odds of selling are down almost 50% from 87% at the highest ever measured in early 2022 to 46% at the end of Q3.
· Active homes are getting about 1 – 2 showings a week with about 13 showings on average to receive an offer (so being on the market for 30 days is starting to be the norm)
· Close to 70% of homes that receive a contract had to reduce prices by 7% ($140,000 for homes in the $1.5M - $2M range)
Looking at all this in the context of national and global unrest, a 30-year mortgage interest rate that climbed to 7.72% recently, and the approaching holiday season when we typically experience a seasonal slowdown, it is no wonder that we begin to believe that the market is weakening.
The real estate market moves in cycles and within each cycle lies opportunity for the savvy consumer. The opportunity that sits in plain sight right now are with homes that are priced between $1.5M and $2M. Currently there are 4 to 5 homes for every buyer – so much choice! We have more supply in this price range than we have had in the last 8 years. We have the luxury of time to make informed decisions since half the homes are on the market for 54 days. This is me, trying to be the best town crier out there!
We can look at the same set of data from one perspective and see scarcity, fear, and indecision. My invitation is that we shift our perspective in the fourth quarter, especially if life necessitates a move to look for the pockets of opportunity to continue creating the live you desire.
