Residential Listing Inventory Triples
SW Florida residential listing inventory triples in past 11 months. On February 15, 2022 we had 1,106 single family homes on the market. This week we had 3,336 in Lee County.
On the condo side Lee County had 297 on the market on February 15th, 2022. This past week MLS shows 1,166. Which is approaching 4 times the inventory from last year.
Uptick in Pending Sales
Home prices have stalled, although we have noticed an uptick in pending sales. This week, total pending sales which includes pendings and pending contingent stood at 1,469 for single family homes. Pending sales have been falling mightily until this week. To give you an idea, total pending sales were 2,726 last April when we began tracking them weekly.
Tracking this information weekly has helped us spot trends sooner since the official numbers are always a month behind.
It appears each time there is a dip in rates pending sales seem to tick upwards. In the past 2 months we’ve seen rates decline from 7% plus to around 6.3% The mortgage market is tied less to what the Fed is doing and more so to how the bond market is reacting. The bond market is telling us we’re going to be in recession and the Fed has over tightened.
Future Rates
One Fed governor is signaling a 25 basis point hike in February while another is signaling a 50 basis point hike. The only difference between the two is one would like to raise faster and hold and the other would like to go slower and take an extra month to get to the 50 basis point hike. Going slower would allow another month to evaluate data and see if they could stop at the 25-basis point hike.
What this means is long term interest rates should hold steady. They could rise a bit, and they could fall some because the bond market realizes the Fed is about done raising rates.
We see continued inventory hitting the market. We could see rising demand if interest rates fall any further. If we could get rates down to about 5.5% we believe many more people would sell their home and move. If this happens, inventory would rise but so too would buyer demand.
Inventory levels are still at decent levels. We wouldn’t want them to triple again as that would be price depressing. Already we have seen prices top out in 2022 and head lower. Prices will be determined by interest rates. Rates will help determine demand, and in a reverse kind of way, supply.
Lower Rates May Lead to More Supply
The reason we say reverse is many people didn’t want to sell because they have locked in at a low rate. If they sell, they must purchase again at a higher rate. When rates come down, it will increase buyer demand, but it may also increase supply.
We should have fresh official numbers out next week for both September and year end averages. We believe we are about 2 months away from reporting flat or declining prices year over year. We don’t make the averages; we only report them. We work on getting our sellers Top Dollar, but it pays to know what the market is doing.
View All Offers in 8 Days
We have a plan to generate all offers on your home within 8 days. Call Brett or Sande Ellis at 239-444-8150 to find out how we generate offers and higher prices when inventory is on the rise. You’ll know fast and avoid costly price reductions by having your home on the market for a long time.
Good Luck and Happy Selling!