Finally a bump in inventory!
It’s all about context as we are at 1,961 listings in the NOVA area, which is about a third of what we’d like to see, but that is up 11% from 2 weeks ago! We’ll take it! So what is behind that primarily? Segue to some market trends to inform you about.
If you have been watching listings through your favorite portal, you have probably been seeing more homes come back on the market after going under contract. Anecdotally, we’ve observed the same thing, though statistically compared to historical averages we are not out of whack at all despite some sensationalistic headlines. There are a couple of reasons behind that, mostly related to buyers’ state of mind right now. After a season of losing out on multiple houses and finally getting a contract, they take a breath and go “uh oh, what have we done?”. “Why did we win the house without having to escalate?” “Did we overpay?” These are somewhat understandable reactions if you aren’t working with an exceptional broker you have confidence in. If you do have that relationship though, and you are working together as a team, the cold feet is unwarranted. The market in the region remains strong. We are still seeing broad, modest price increases and analyzing out into the next 4-6 quarters at least see no reason for that to change. If you are waiting for major shifts in interest rates, prices and inventories, get comfortable. It will be a while.
Some of this stuff is becoming self fulfilling. Inflation, especially cost push inflation due largely to regrettable energy policies, remains stubborn. That means we can’t moderate rates. If rates don’t moderate the move up market won’t pick up traction and supply will remain low. These dynamics will ultimately improve for a host of reasons, but think in terms of quarters and years, not months.
So if you are a potential buyer, the golden ticket is not coming for being patient. If you find the right home at a good value, dive in. In a couple of years when the prices are higher you’ll be glad you did, and if rates moderate you can refi. Home sellers the limited inventory market still puts you in the driver seat, and if you are a move up purchaser take a hard look at the non-financial reasons for doing so. Will they carry the same weight, or even more a year or two from now? Tough questions to be sure, but remember that I’m here to help so reach out anytime!
It’s a good life.
Chris
