After who knows how many years as a Realtor, it's finally time for me to start sending market updates to friends and family. The goal is to only send things that will add value to your life. If you aren’t getting value out of what I’m sending, no problem! You can unsubscribe from communication below. Here we go with your first market update!
At the end of the day, the real estate market is fueled by the relationship between supply and demand. When we have low supply and high demand (i.e. the beginning of Covid), the market explodes and we see significant appreciation. When we see high supply and low demand (i.e. the 2008 recession), we see significant depreciation.
Our demand for the year is down 23% year over year. Interest rates are significantly higher than they were last year which has reduced the buyer pool. Buyers just can't afford as much home as they could when interest rates were lower, and some first-time home buyers have chosen to rent instead of buy.
We should see depreciation then, right? Wrong. Supply, at the same time, is also down 23%. 62% of homeowners have a sub-four percent interest rate on their mortgage. These homeowners now need an inflection point in their life in order to move as they can afford far less home in the current interest rate environment.
Due to this strange new balance, we have seen 8.1% appreciation year to date (~$45k). We normally see all of our appreciation in the first half of the year, so this is a healthy amount. Looking forward, the market generally begins to slow down at this time each year. I would expect to see a very small amount of appreciation or even depreciation for the remainder of the year.
The TLDR: Buyers - other than changes to interest rates, there shouldn't be a material difference between buying a house now or a few months from now. Sellers - we are still seeing multiple offers on 41% of single family homes with attached homes following the same trend. If you are planning to sell this year, I would list sooner rather than later to try to capitalize on a bidding war.
