In this 12 minute video, Amber Kovarik and I talk about supply, demand, lending, and discuss what the numbers mean and what the actual buyer experience is like versus only following general data trends. The numbers don’t always tell the whole story.
The market is confusing right now. Inventory is increasing and demand is decreasing. Yet, 80.5% of offers being written right now are for listings with multiple offers. Over 57% of closings are closing over asking.
The reason we watch supply and demand so closely is that they help us gauge the leading indicators, like housing permits, loan applications, number of new listings, and number of listings going pending. The Cromford Market Index is the best leading indicator available. It peaked at an insanely high number of 514 on March 14. Anything over 100 is a seller’s market and yes, I just said 514. Yesterday it was 453. What that means is it is still a super hot seller’s market. It also means that the sky-high appreciation rate is starting to slow. This is good for everyone.
In March there were 10 buyers per listing and today there are 5 buyers per listing. Remember it only takes one buyer to sell a house.
As people are out and about more, the personal savings rates will decline. Dr. Lawrence Yun, Chief Economist for NAR, expects “revenge spending” on more services and entertainment in the coming months which will slow some of the frenzy we have been experiencing. He also expects that bidding wars will not be commonplace in 2022.
Consumer price inflation increased by 0.8% from March to April, the largest increase since June 2009. It increased by 4.2% year over year, the highest since September of 2008. Core inflation is up 3% year over year. Experts blame supply chain challenges and last spring’s weak readings and believe this inflation is short-term and will settle down in the coming months. Housing has taken on the largest rate of inflation at 18% (nationally) year over year. Consumers call it appreciation and economists call it inflation.
Sarah Perkins is an award winning account executive and has been in title sales since 2004. As the Director of Industry Research & Senior Account Executive, Sarah’s role is to bring real estate transactions to Navi Title. Sarah supports her clients by helping them navigate the ever-changing real estate space through thorough research and understanding of current trends impacting today’s home buyers and sellers.