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Spiking housing supply & fewer buyers

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finally. There have been significant changes in housing inventories. But is it because sellers are in a hurry to list their homes? No. It’s not the culprit. Let’s talk about supply and some things in my head about today’s market.

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Navigating the 7/26/22 shift (Sign up here (for the real estate community)).
8/11/22 Realtist Meeting (Sign up here from 7/27/22).
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5 things about today’s housing market

1) The surge in housing supply is not due to sellers.

In a short period of time, the three-week supply in the Sacramento region has gone from three weeks to ten weeks. What is the cause of this change? It’s easy to pin this to a seller who is in a hurry on the list, but it’s not. This is about the fact that few buyers have contracts. Since May, sales have fallen by nearly 2,000. That is, the list that would normally have been sold is still on the market. In other words, the surge in supply came from weakening demand rather than having more lists on the market.

Supply forecast: The 2.5-month supply is a volume-based forecast by the end of July. This means that numbers will be stronger in the two weeks after most of the month’s sales have ended in MLS. If you want to be wider, the range is 2.2 to 2.5 months. I pulled these stats yesterday, and today my forecast is 2.38 months for the region. Just heads up.

A line graph showing monthly housing supply (and recent surges) since 2014.

No joke about the small list: Since the pandemic, we’ve seen a modest number of new lists, and haven’t seen a surge recently (see the blue line).

Line graph showing a new list of Sacramento regions since 2017

Seriously, this is about buyers: If you think your sales are low, look at the black line (2022). Sales have skyrocketed in the last few months. This is the x factor when adding to the pile of available lists. Remember, Housing supply can grow from sellers listing more often, or from buyers buying fewer homes...

A line graph showing the volume of 2022 up to July (actually decreasing compared to other years).

2) Date advice or real estate advice?

Much of the housing advice these days sounds like dating advice.

– Be patient.
– Be realistic.
– There is one shot to make a first impression.
– Do your best to get ahead.
– It’s hard now.
– Not today. Not like before.
– It can take some time to find the right person.

I’m sorry if it’s terrible. There is a price cut to make up for this.

Price cuts in the Sacramento area. This table shows the percentage of price cuts on the list (47.22% across the region).

3) Buyers are rarely exempt from evaluation.

It is unlikely that you will get an appraisal exemption from the lender during your purchase. It is less common for lenders to pass a purchase without an appraisal. It seems that less than 10% of purchase loans are exempt from appraisal. Please note that a lender’s appraisal exemption is not the same as a buyer removing the contingency of an appraisal.

Data showing how often Freddie Mac and Fannie Mae are exempt from appraisal.

4) New construction volume is unmanageable:

June was a cruel month for new home sales in the Sacramento area.Around North State BIA Data and volume fell 58% from June last year, even more similar to 2014 levels. This is a bigger blow than the resale market, where sales volume fell by nearly 25% last month.

Bar chart showing sales in the Sacramento region of new homes in June

5) There is no price range that is not affected by trends.

No price range is unaffected by higher mortgage rates.Statistics from California Real Estate Agents Association Indicates that there are fewer pending contracts in all June price ranges in the state. Of course, not all neighborhoods and property types will be at exactly the same temperature, but they will not have a false impact on the entire market. Or, as the saying goes, all ships go up and down with the ebb and flow of the tide.

Line graphs showing pending volumes are shrinking across all California price points

Market statistics: We’ll be publishing a lot of market stats on our social channels this week, so take a look twitter, Instagram, LinkedInWhen Facebook..

Thank you for being here. Thank you very much.

question: What is the most noticeable to you? Any advice to add to the list? I would love to hear your opinion.

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