- Jobless benefit claims are down to their lowest levels since the 1960’s evidence of demand for labor exceeding supply.
- Builder confidence and housing starts for single family homes are on the decline.
- Incomes are up in the private sector (W-2 earners) 6.7%. With inflation at 8.5%, you need a side gig to keep up.
- To add to the inventory woes, the recent rise in interest rates makes selling a home with a low interest rate of say, 2.5% to purchase a new home with a 5% mortgage unattractive.
- 58% of homes sold over asking price with 102-103% over the asking price as an average.
- Starting to see some price reductions and days on market edging up slightly. Prices are still on the rise and expect to continue, but the National Association of Realtors is telling us to watch for increases in days on market and drops in multiple offers as a sign of slowing.
- The big player in the market now is the iBuyer, or investment buyer who uses pricing algorithms to price homes. Offerpad, Zillow and Opendoor are names you will recognize. The rise in interest rates do not impact them as they buy with cash and with the traditional buyers using financing dropping off, they are in a strong position. This group has only seen an appreciating market and they survive on volume. Zillow recently lost $800M and had to shut down their Zillow Offers business as the pricing algorithm they used lead them to overpay for homes and deal with lawsuits. If the market turns, the iBuyers are positioned to become the “desperate seller”.
- FYI, the last balanced market was in 2014.
May 1 market snapshot The Verdes:
Active listings: 1 down from 3
Under contract: 14 down from 15
Sold: 12 up from 9
Days on market: 12 down from 15
Months of Supply: 0.43 months
May 1 market snapshot Fountain Hills:
Active listings: 70 up from 60
Under contract: 84 down from 115
Sold: 113 up from 83
Days on market: 18 up from 16
Months of Supply: 1.17 months
