There is a window of opportunity for buyers as those who have been waiting and watching finally saw a decrease in mortgage rates (below 5% – the lowest since April) coupled with a slight increase in supply. Chief economists are now projecting that the short-term fed funds rate hikes are unlikely to do any further damage to mortgage rates and that we should see rates stabilizing around 5.5-6% for the rest of the year. Some of the popular internet search sites already reported an increase in internet home searches and web based home tours which had been consistently declining since last April.
According to the National Association of Realtors, June housing inventory rose 9.6% from May. Nationally, as of the end of June, there was a three-month supply of available homes. Although this is well below normal, any upward movement is encouraging for buyers but we’re not even close to the point where there’s enough inventory to meet buyer demand. So we will see some cooling in listing prices but it is doubtful that we’ll see a significant drop in the near future.
Should you buy a home in August? Rapid changes in mortgage rates are likely to continue as economists debate whether to be more concerned about inflation or a recession. The upside of buying now is potentially locking in a more reasonable mortgage rate as they have corrected a bit and might get pushed up in the near future. Median time on the market has increased slightly, meaning buyers have a bit more time to compare and evaluate options. Also inventory has picked up enough so that buying isn’t as likely to end in a multiple offer bidding war. If you are looking to buy an income property, rents are still up 24.6% since June 2019.
Should you sell your house in August? Despite the small increase in inventory, there continues to be less competition (nationally inventory is still down 46% since July 2019) and it may be a good idea to list now in the event that mortgage rates are pushed up further and more buyers are forced out of the market. Also home prices have continued to increase despite higher mortgage rates and an increase in housing supply.
Trying to time the market as the economy wades through this period of uncertainty isn’t the best strategy as there isn’t likely to be significant improvement in prices or interest rates any time soon. We are approaching a balance between a buyers and sellers market so investing now is a win-win.
Here’s the numbers from our local market this week:
We had 3 new condos and 1 new homes come onto the market this week. We currently have 36 active condos ranging from $377,000 to $3,200,000; the median condo price is $823,950. We currently have 47 active homes on the East Shore ranging from $1,075,000 to $64,500,000 with the median price of $3,150,000. Here’s a year to date local update:
Local East Shore Lake Tahoe, Nevada Stats – All Year to Date
Total Sales YTD:
Condos: 61 (↓20% YOY) | Homes: 55 (↓50% YOY)
The Median Sales Price:
Condos: $695,000 (↑4% YOY) | Homes: $1,700,000 (↑6% YOY)
Number of Sales Over $1 Million:
Condos: 12 = 20% (↑6% YOY) | Homes: 47 = 85% (↑7% YOY)
Highest Priced Sale:
Condos: $5,665,500 (↓6% YOY) | Homes: $32,000,000 (↑52% YOY)
Median Price Per Square Foot:
Condos: $593.82 (↑14% YOY) | Homes: $625 (↑5% YOY)
Median Days on the Market:
Condos: 69 (↑17% YOY) | Homes: 75 (↑4% YOY)
List to Sell Price:
Condos: 96% (↓1% YOY) | Homes: 96% (↓6% YOY)
Price Reductions this Week:
Condos: 2 | Homes: 2
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Craig Zager & The Zager Group