It’s time to be selective about who you pay attention to.
Every couple of days I pull up the Washington Post to see that perspective and this morning was greeted with a top of the fold article declaring that the April job numbers were expected to be disappointing and a sign of the administrations faltering economic policies. At 10:30 we had a new article declaring that the actual numbers came out and are “solid” as the economy created 177,000 jobs, 25% more than the projected 133,000. Oops. I’m not picking on the Post as it is admittedly not alone in its erroneous prognosticating. OK, maybe I’m picking on them a little. There are a lot of big, big swings going on across our government and economy, many of them contravening and offsetting. For example, the massive push towards government deregulation and the unleashing of the energy sector and the attendant lowering of costs are great for prices and business confidence. On the other hand, tariff policies can be inflationary and bad for consumer confidence. It’s time to pay attention to the data, and to know what to focus on and what to ignore, now more than ever. And to allow a little time for these large changes to manifest themselves before rushing to declare that the sky is falling. So let’s do a little of that for the real estate market.
Inventory rose 17% last week from 2,675 to 3,119 after, incredibly, falling the previous week, demonstrating the need to have your pulse on the market at a weekly level. Sales were down the last 3 weeks from 745 to 685 to 543, though the Easter weekend surely contributed to the last number. This translates to a 1.3 months supply of homes on the market, up from 1.1. All of this points to a little bit of cooling in the market, and there is nothing wrong with that. Prices are up 2.7% year over year, a healthy and long term sustainable pace.
I read some interesting studies this week as well. Nationally the typical seller wants 9% more for their home than the typical buyer wants to pay! That’s a pretty big gap and I think goes a long way towards explaining why sellers are still overpricing and we are seeing more price reductions. It’s important to note that while that is happening on list prices, at least locally, it doesn’t mean average sales prices are declining. They are not.
Lastly, rates are down to about 6.8%, which is actually over half a percent lower than this time last year (7.4%). So the NOVA market remains strong, but is moderating. Call if you have questions, inputs, or would like to discuss further!
It’s a good life.
Chris
