The market is Roaring….but there are some headwinds on the horizon.
Buyers are out in force once again, booking showings and overwhelming Open Houses. One of my peers had 75 people through their open. The interesting thing was that all of that activity resulted in just 4 offers. Which brings up an interesting reality about this market. Buyers, while active and ready to purchase, are being a little more circumspect than in previous blitzes. They see a house they like and ultimately write an offer, but instead of going to the car and signing right after they see it, they contemplate things for a day or two. Then they are coming in with more reasonable offers. And while many properties are getting bid up, we are seeing a lot more contracts with some contingencies, which is really a healthier market to be in. This is reflected in the Days on Market figures. The Median is 14 days and the Average is 25. So it’s clear that while some places are blowing out the door, others are sticking around for a good bit. The reason? Unrealistic pricing, poor condition and lousy marketing/representation.
Inventory levels are right at the 5 year average, and not one of us was happy with inventory levels the last 5 years. So the question I always ask in doing my projections is: “Where will the inventory come from?” Several things point to some more inventory. The first is the natural turnover that occurs when any administration changes. This one is of course supercharged as many people who have worked here locally will see their jobs relocated to other parts of the country (why Department of Agriculture employees are stacked up here instead of in Iowa or Nebraska escapes me). Additionally as the Federal workforce is thinned either through buyouts or firings more properties will come on the market, though many of those folks might make their way into similar roles in the private sector and not need to move.
Finally, as many large corporations and the Federal Government mandate in office work, many people will be “boomeranging” back to properties closer to their work.
I mentioned headwinds and one that I see lurking is the amount of credit card debt and revolving credit that consumers have accumulated due to the debilitating inflation cycle of the Biden administration. Credit card debt is at it’s highest level in history, with some balances on cards with rates close to 30%! The other is the rise in insurance rates that is surely coming on top of the double digit (in some cases high double digit) increases of the last couple of years. Stay tuned.
As always I’m here to assist and provide information in any capacity you need whether buying or selling.
It’s a good life.
Chris
