Unofficially we saw both median and average home sale prices decline in June from May’s sales numbers. We say unofficially because these stats are numbers we procured from MLS. It is possible there are a few more sales in Lee County from other Multiple Listing Services in the state. Largely we expect these numbers to hold.
We saw May’s median price decline slightly from April, so this makes two months in a row median price will have declined. We must be careful not to draw many conclusions from this fact because it is not uncommon for prices to decline after about April. There is seasonality to home prices as higher priced homes tend to sell in season.
We are seeing double digit increases in prices year over year, but the pace is declining. We believe we will see more of that this year as we start bumping up against higher sales prices in November and December of last year. The trend to watch will be if the year over year sales pace begins to slow.
That could happen as we are seeing listing inventory grow. This tells us supply is outpacing demand. We are watching listing inventory grow, closed sales decline, and pending sales fall, which is an indicator of future closings. When listings go up and pending sales go down, we know supply is outpacing demand.
What effect will continued rising interest rates have on the economy and the housing market. The Fed is raising rates to slow demand in the economy. The question is, how much will that slow housing demand? We believe it has already had an effect, and more interest rate rises will further constrict the market. Some say low rates is what propelled the market to the prices we have today. Eliminating those low rates could take away some of those price gains.
If this scenario happens, we will see more listings hit the market with fewer buyers. We could see further home sale prices decline in the future if we see higher interest rates.
If you are a seller, it will be more fun to sell today than it will be next month. Already we can say it was more fun to be a seller a few months ago than today, and that trend may continue.
If you are a buyer, it may not be more fun to purchase next month than today. Rising interest rates may eat up more than any potential savings on price, so waiting could cost buyers. This is one of those few points in time where waiting could cost both buyers and sellers. It could especially cost sellers who need to sell and get a new mortgage when they buy.
Take Action Now
Bottom line, if you have a property to sell, do it today. If you wish to buy, do that today as well. You will probably do better working with an experienced Realtor who has been through market shifts before. An experienced Realtor can calculate how much more it will cost you if rates go up, even if prices came down. We have a video of this on our YouTube channel https://www.youtube.com/Topagent entitled Better to Buy Real Estate Now or Wait? We filmed it 2 months ago and gave illustrations of what would happen if interest rates climbed into the 6’s. We know this already happened. What if interest rates climb into the 8’s? The same logic applies.
Buyers have more choices now with increased listing inventory. Rising rates may sap their buying power and take away choices available today.
Buyers can search the MLS like a pro at www.LeeCountyOnline.com Our database is updated instantly, so you will see the latest listings as they come on market and won’t see homes that closed weeks or months ago.
Sellers can find out what their home is worth at www.SWFLhomevalues.com If nothing else, you should track the direction of prices each month and see how your home is doing.
Our team is here to help you. Give us a call and put our knowledge, data, and experience to work for you. Always Call the Ellis Team at Keller Williams Realty 239-489-4042