The market is changing fast!
I started writing this market update at the end of May when the final April numbers came out and here we are into June... So much has happened in May that I struggle to share the April update without also telling you that May and June are looking a lot different.
As you can see from the two graphs below, more homes are coming on the market, but the number of homes going under contract is declining.
We are on our way back to 2018 real estate activity.
Inventory continues to rise...
At the of May we had 4,970 homes for sale compared to 2,763 at the end of April. While that 80% increase is significant, we are still trending very slim on inventory compared to years past.
How do these number compare historically? Well... we are used to averaging about 7,000 homes for sale this time of year:
End of May
2022 = 4,970
2021 = 1,712
2020 = 6,039
2019 = 7,505
2018 = 7,628
What does that mean for you?
With over 3,000 homes selling per month, it is still a strong sellers market. However, the increase in listings coupled with 3 straight months of fewer home sales compared to the previous year and a decline in the number of homes going under contract indicates we are starting to see a shift in the market. How significant will this be? It's too early to tell... and, keep in mind, even with this shift, our activity is still stronger than it was pre-Covid which was considered a great real estate market at the time. This shift is being felt, though, as we are seeing homes stay on the market longer, price adjustments and fewer multiple offer situations.
Here's a quick look at the monthly activity trends: Preliminary numbers of homes sold for May 2022 is 3,190 which is a drop from last month as well as last year.
Let's take a look at prices....
Home prices are still the highest we've seen, however, the increase in mortgage rates will most likely keep home prices from escalating as we have seen in the past two years, but here is some insight from Stephen Roberts of Austin Mortgage Lending:
"YES, housing prices can always go down. There CAN be a CORRECTION (no asset class goes "up" in a straight line). However, here is a ANOTHER piece of evidence that shows housing may stay very resilient despite the stock market trending downwards (and Crypto losing 50% of their value). This is a great chart by the world famous Barry Habib.
VACANCY rates across the country are at ALL TIME lows. There is simply NOT enough housing for everyone who wants a home. Not enough supply, still strong demand - thanks to rising incomes and dual income households - this should keep prices up.
And remember... UNLIKE the stock market, where the top 10% of American earners own 90% of ALL OUTSTANDING stock.... about 65% of Americans OWN the house they live in... and another 15% of homes, that are rental properties, are owned by single, individual investors.
Homeownership is much more attainable AND much more wide spread than the daily fluctuations we see in financial news, the Wallstreet Journal, and the nightly news."
And, of course, everyone's favorite - Check out the latest >>> MEDIAN SALES PRICE APPRECIATION BY ZIP CODE
If you are curious about what is happening in your neighborhood or have been thinking about buying or selling real estate in the Austin area, call me! I'd love the opportunity to help you!
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