11/15/2023
I posted previously about how it was trending towards a seller's market in early 2024. We had appeared to peak in October with interest rates and listing inventory, so here's the update to how that is looking a month later. This is for single family homes in Reno/Sparks. (Pulled from Mortgage News Daily and NNRMLS)
-Oct. 17th: Avg Rate 7.92%. Active listings - 838
-Nov. 15th: Avg Rate 7.45%. Active listings - 749
Over the last 7 days, 77 listings have gone under contract, another 31 were withdrawn from the market. In this same time, there has been just 53 new listings added to the market. After months of balance, demand is once again outpacing supply.
This week's inflation report was encouraging, and the economist projections seems to follow suit with more positive outlooks for 2024. The consensus appears to be a very slight increase in unemployment through next year, but remaining low around 4%, and offset somewhat with a marginal increase in wage growth. The projections for fed rate cuts still seems to be a matter of who you choose to believe, with banks like UBS projecting an aggressive rate slash of nearly 3%, but others projecting a more measured and nominal decrease from today's rate. Goldman Sach's, for instance, is projecting about a 2% cut.
Personally I feel the Fed is still targeting a 2% inflation rate, which we haven't yet reached, and as part of that will want to keep housing prices as cool as possible. So, any rate cuts will come with some reluctance, but they will come. Despite the rate hikes over the last 18 months, consumer spending has remained strong, and our local median home sales price has remained relatively flat. In fact, Since June, the needle has barely moved, as supply and demand have been very balanced. Hidden within that flat median sales price, however, are seller concessions. While sales prices have held, many of those contracts are crediting buyers tens of thousands of dollars to help them buy their interest rates down. As demand outpaces supply over the next several months, the market will become more competitive. Choices, seller credits, and price negotiations will shrink. These numbers affirm my position that prospective buyers should not wait for interest rates to come down, but rather should be shopping now while there is less competition and they still hold some negotiation leverage. The trajectory that we're on is leading to a strong seller's market in Spring 2024. Price appreciation is looking very likely.
I know this is a long, kinda nerdy post, but I hope my friends and clients find it to be useful information. I track these numbers and watch the trends very closely as I know that timing the market properly can be hugely advantageous to your real estate plans.
