Monthly market titbits:
- How much has your home appreciated in value? Depends on when you bought your home. Tom Ruff of ARMLS reports that comparing the reported average and median sale prices for each year to the 2021 metrics, we can see the percentage change in prices based on the year the home was purchased. Anyone who purchased a home in April 2011 has seen an appreciation rate based on the median sales price of 237.84%. The lowest appreciation applies to buyers purchasing at the peak of the market in 2006. Their current appreciation is 47.06%.
- Adding to the supply woes is the drop off in new construction. Construction had not recovered from the crash in 2008, and supply chain interruptions with lumber due to the missed calculation that the housing market would slow down due to covid has also put pressure on housing supply.
- Michael Orr of the Cromford Report on the prospect of the market starting to “cool off”:
“All changes tend to start small and then grow. The current market cooling is like that. We now have supply increasing and demand falling. This will gradually release some of the steam from the over-heating engine and the market can trend back towards normality. The primary mechanism by which they cool down is through prices. In hot markets pricing goes up which causes demand to weaken, which means the supply gets a chance to recover. When prices go up, some buyers can no longer afford to buy and drop out. The faster that pricing goes up, the more buyers tend to drop out, at least in a healthy market. Even though we have entered a cooling phase, it will probably take several quarters (if not years) to cool down to normal and prices will continue to rise at a brisk pace for quite some time.”