Sellers have less power than they did only 6 weeks ago. The market is very different than it was recently. It is not catastrophically bad, but it is far trickier than it was.
National Real Estate:
- Available single family inventory increased to 491,000 or by 3.25% two weeks ago, a 31% year over year increase and 60% up from the bottom in early March. Based on the steepness of the increases, there are no signs of slowing.
- There was an increase in new listings during the week of the 4th of July, a first in over seven years.
- 31.5% of active listings in the largest metros reduced their price in June. Boise had the highest rate of reductions at 62%. For the city specific price reductions, click here.
- About 60,000 purchase contracts were canceled in June, or about 14.9% of all homes that went under contract during the month.
- More than 50% of builders also saw an increase in contract cancellations in June.
- Purchase loan rate locks (a way to measure demand) were down 10.8% from May to June and down 22.7% in Q2 2022.
Fannie Mae’s June monthly National Housing Survey:
- 81% said the economy is on the wrong track, an all-time high.
- 20% said it was a good time to buy, an increase from May’s all-time low of 17%.
- 26% said it was a bad time to sell, an increase from May’s 19%.
- 27% expect prices to decline in the next 12 months, an increase from May’s 24%.
Real Estate News:
- One of the previously thrown out commission lawsuits against NAR and others, which seeks class action status, has been amended and is back in court. The suit alleges price fixing on commissions damages buyers.
- Proptech investment is starting to decline. Despite the $13B invested in real estate start ups in the first half of the year, investor interest in the sector has declined by 23% since April.
- Due to the 9.1% inflation rate (12.3% in Phoenix) the Fed could raise rates by up to one full percentage point.
Final Thoughts:
In Tom Ruff’s June STAT report, he wrote about a recent article that accurately describes our current situation. He wrote:
“As “affordability issues take their toll”, it has become much more difficult for traditional buyers, particularly first-time buyers, to purchase a home. In the link just provided, a report done by First American Financial Corporation lists Phoenix as the fifth city in the country where affordability has declined the most year-over-year at 56.1%. Charlotte, North Carolina, led the nation at 62.5%. In the report, Mark Fleming, Chief Economist at First American, reiterates what we already discussed, ‘The pandemic-driven supply and demand imbalance that fueled historically strong house price appreciation is coming to an end as the housing market rebalances to a new normal.’”
Copyright 2022 Sarah Perkins
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.