“John, 8 of 10 offers I was involved in LAST WEEK were in a bid-situation”, said John, my good friend and mortgage broker. In other words, bidding wars are back.
According to the National Association of Realtors (NAR), we’re already starting to see more multiple offers than we saw earlier this year.
This is real estate today… not January 2023.
Real Estate Today – May, 2023
To help you digest this swift change in market action, below I share key data points you may find useful:
* 5 Charts in my latest real estate market update video paint a picture of change.
* Demand – a survey by Zonda showed 98% of millennials want to become homeowners. And, the NAR says the average age of a 1st time buyer is between 33-36. If we go back 33 years to 1990 and look at birth rates in the US, we find a massive spike. Because of the spike in birth rates that started in 1990 and continued through 2007, we’ll have more people in the US turning 33 – starting now – for the next 17 years than we have since the baby boomer generation.
1st-time homebuyers represent just 26% of the total transaction in the US. With inflation down from 8% to the mid-4% range today, and falling, mortgage rates should ease this year. When that occurs, the marketshare of millennials will begin to rise (Is that beginning now?).
* Prices – The US hit a home price bottom back in February and are up 6% from January 1st. And after falling every month since last July, the median listing price appears to have found its support.
Real estate today is a far cry away from the peaks and valleys of 2022. Back then prices hit all time highs while inventory set record lows.2
* Supply – On a national level, we are just a few days away from dipping below the early 2022 lowest levels. Should this happen, this puts inventory at the lowest levels in history. Look below at my Weekly Inventory Update for a complete perspective.
Check out this chart showing far less than half of the homes for sale in real estate today than we had in the 80’s.
Housing supply should remain low in real estate today due to:
* New construction is down 30% from it’s peak
* Existing homeowners don’t want to give up their low rates
* Nationally, 50% of listings are selling within 14 days
Change happens fast. From 2020 to the end of 2021 it was a sellers market. Back then inventory crashed almost 70% in just 18 months. Then, at the start of 2022 it shifted to a buyers market as inventory rose 110%and prices began to slip. And now we’re staring at yet another swift change in market conditions – back to a sellers market?
Comparisons are only to be used as a guide. What happened in 2021 or 2022 are quite meaningless as metrics and data are no longer relevant today. All we have now is real estate today and our current economic factors.
Thanks to my friend and mortgage broker, John, who knocked me off my seat yesterday morning with his comment.
I trust this information is of value to you.
If you’ve been thinking of selling, please call me so you can get prepared in advance of renewed demand. And if you’re a buyer, you’ve been watching price reductions and price negotiations the last 12 months. Will that become a thing of the past?
Yesterdays information is toast. All we have now is real estate today.
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*** Your Weekly Inventory Update ***
* 4 years ago there were over 54,000 properties available in S. Florida
* It bottomed in February 2022 at 14,485… a 73% drop
* Last week there were 28.027 available… a 102% rise in 15 months
* This morning’s Inventory is 27,979
*** Inventory is DOWN 17 weeks in a row ***
