Market Update - 10.10.24
This fall marks a quiet end to a quiet year in real estate. Our April update quoted the concern of an agent who worried there would be “many listings and no buyers”.
This was true in one sense. Inventory surged to pre-pandemic levels and homes that would have sold in a few weeks had scant showings.
But the season saw a slight uptick in sales over 2023. Year to date, 101 homes have sold compared with 85 during the same period last year, representing a sturdy 18% increase.
High interest rates have been the major factor in the slow sales. But so have been over-ambitious Seller expectations. The frothy days of the pandemic market taught Sellers to price aggressively. With some listings and Sellers, this tendency continued even into 2024.
The graph below shows the median sales price of homes as a percentage of their original list price. The data has been averaged over twelve months to create a smoother line and clearer overall illustration.
The graph, in its flatline section, shows the effects of the pandemic from late 2020 through the end of 2022. During this time, homes sold for 100% of their listing price. (The graph represents the median data, so there were many individual homes that sold for more than list price.)
Then, in late 2022, as the influence of the interest rate hikes began to work their way through the economy, the percentage began to fall. Presently this metric is as low as it has been in ten years. This makes sense for a slow market populated by a few still-optimistic Sellers.
We predict this metric will turn the corner in 2025 and the price of homes as a percentage of original list price will begin to climb. Sellers will recognize the strong inventory established in 2024 and understand they need to price accurately. And Buyers will begin to feel the benefit from the recent interest rate drop as well as possible future reductions later in 2024 or in 2025.
This means 2025 could be a great year to buy or sell a home. Buyers will enjoy less expensive financing and greater inventory. And humble Sellers will price their home accurately and find a Buyer.
But first, an election!
