Home sales fall behind 2020 levels in August for the first time this year. Is this a sign of a slowing real estate market, or simply lack of inventory?
Home Sales Fall Behind 2020 Levels
Last week we reported inventory increased for the fifth straight month. In February, listing inventory stood at 1.916 homes. In January listing inventory was 2203. August listings were on its way up at 1,764. Perhaps we need inventory levels closer to 2,000 or more to sustain the blistering pace we have seen this past year.
It could also be that inventory is rising, sales are slowing, and buyers have cooled off. Home prices peaked in April and May and saw a decline. Funny thing though, median home prices stabilized in June and July while average prices went up slightly in August.
If the market was declining, we would expect to see the trifecta of rising listing inventory, declining sales, and declining prices. Right now, we have two out of the three, and it is quite possible sales will pick up as inventory increases.
It is also possible rising interest rates will deter some home buyers. October 1st will bring in flood insurance changes which will raise rates on some. Rising insurance costs can affect home affordability.
Florida is still a state where people are attracted to. Some northern states markets have begun to cool a bit while others have not. It is safe to assume, Florida is an attractive option for many up North which adds to our demand. As listing inventory increases, we may very well have excess demand to make up for the inventory.
In any market, many homes sell, and some fail to sell because they were overpriced. When a market begins to shift, you do not want to overprice. I am not saying our market has shifted or will shift anytime soon. All markets shift eventually. Proper pricing becomes critical when they do. To be honest, proper pricing is always critical. Would you believe that in this great market, some sellers have failed to sell? It is true, and it happens in all markets, up down, and sideways.
Hire the Right Agent
Hiring the right agent is critical now. Marketing and negotiating matters more than ever. Some mistakenly believe they can throw a home on the market, and it will sell. The truth is it might sell. The question is, did it sell for as much as it should have or did seller leave money on the table? There is an art and science to getting what your home is worth. It takes knowledge, experience, skills, and marketing. If you thought it was expensive hiring the best agent, just see what it costs you hiring the wrong one.
As we study the market, we will be looking at several key indicators. Of course, we will watch home prices. We will also watch inventory levels, sales velocity, dollar volume, and bring back and track our current market index which helps predict forward motion of the market. If you do not know what the Current Market Index is, search for it on our Blog https://blog.topagent.com
If you are interested in selling, call Sande Ellis or Brett Ellis at 239-310-6500 or visit www.SWFLHomevalues.com to find out what your home could be worth.
The market goes up, the market goes down, and sometimes it just goes sideways. Do not let the market dictate your decisions. Talk to the Best and get your questions answered.
The Ellis Team has been voted the Best in Real Estate for 7 straight years in the News Press Readers poll. We thank all our past and future customers. We look forward to helping you buy or sell your next SW Florida property.