To some, the latest edition of the RMLS market action may look like the market might be on a downturn first glance, and it certainly does without context. Zooming out and taking a longer look at what the market has done over the last year paints a much different picture.
Looking at the numbers month to month, average and median prices have dropped and average market time has increased. Under normal market conditions, these numbers might indicate that we’re heading into a buyer’s market. Looking at the year over year numbers it may not be that simple though.
Average and median sale price increases are still the highest in the country over the last year according to the most recent Case Shiller Report and average market time is 18% lower than it was in August 2015, so really this may only be a slight speed bump for a market that has been going 100 miles per hour for the last year. We are seeing more seller concessions or willingness to accept contingencies. We may be cruising at 95 MPH now.
The market slowing down slightly is welcome news for buyers looking to get into a new home, as it is more likely they won’t have to battle multiple offers well above asking price when looking for a new home. They can now spend a little more time considering homes when they’re looking to buy, but don’t think too long or it will get snapped up. There will always be overpriced houses on the market, regardless of market temperature.
While sellers can’t expect to get the record high prices they were getting just a month ago, homes are still selling rather quickly, a seller who’s priced their home correctly is still likely to get the offer they want on their home relatively quickly. And, like always, location and price point matter: 1.9 months of inventory represents the metro market, not the pocket that you want to live in.