May market tid-bits:
- Some housing market experts predict home prices may start to decrease over the next few months. We are already seeing that not all homes are flying off the shelves, and some are forced to make price reductions if the property does not meet price and condition expectations.
- There are market trends that have caught the eye of market watchers: On May 1 there were an average of 102 buyers for every 26.5 homes for sale a 1 to 3.85 ratio. On May 31, there are 96 buyers for 34.4 homes for sale, a 1 to 2.8 ratio. We are moving in the direction of a more balanced market but have a way to go to get to 1 to 1 ratio.
- A seller’s market is an auction. A buyer’s market is a shopping mall. We will not see a buyer’s market unless we see more inventory to give buyers more choices.
- Do not confuse a reduction in the rate of price increases as a price reduction. If prices are predicted to raise 17% in a year, and the numbers change due to affordability (interest rates) to a12% year over year increase that is not a price reduction. It is reduction in the rate not the direction.
- To see prices drop we will need to see more price reductions and sales price over asking reductions along with days on market and buyers getting concessions from sellers increasing.
- Signed contracts for new homes dropped more than expected and first quarter GDP declined at an annual pace of 1.5%, greater than expected.
- When looking at inventory/supply of homes nationwide, an interesting fact is approximately 100,000 homes are lost every year to aging and replacement.
- In Rio Verde we are seeing listings up (but is moving from 1 to 3 anything to get too excited about?), months of supply up to 0.79 months from 0.43 months (6 is a balanced market) and closings still running around 10-12 a month.
- In Fountain Hills we went from 113 to 61closings last month. Shelves being restocked with new listings moving from 70 to 99. Months of supply in the Hills moved from 1.17 to 1.43 now.