September is normally the peak of inventory in the market. After September, people start to consider taking their house off the market and waiting until after the New Year when the market picks back up.

This year, September had some confusing data behind it. Active listings (supply) increased by 11%. However, closed homes (demand) decreased by 21%. With supply increasing and demand decreasing, one would expect to see depreciation. However, we actually saw 0.69% appreciation. My opinion behind this is that buyers are competing over new listings and disregarding “stale” houses that have been on the market for longer than a few weeks.

Unless you are currently buying/selling, I think the year to date numbers tell the more important story. Year to date new listings and closed homes are down 20.5% and 20.6% respectively - almost the exact same amount. Overall activity is down because people are hesitant to trade their 3% interest rate mortgage for a 7.5% mortgage. When looking at this balance, it’s no surprise that median home prices are only up 0.9% year over year. As long as new listings and closed homes fluctuate by a proportional amount, we will stay in a healthy, balanced real estate market.

The big winner in the market is the first-time home buyer. Unlike current homeowners, first-time home buyers are comparing renting to buying. The wealth built through owning a home will win every time in this scenario (reach out if you want me to show you how). With less competition, first-time home buyers can be picky about the house that they buy, negotiate hard on price and inspection especially after the first weekend, and start building wealth through real estate.