In parts of the world, Summer is starting to really heat up, while it seems the housing market might be cooling. Or, at least, starting to cool.
In April we predicted there would be 564k home sales, but we ended up with 4.5% less with 538k home sales. That’s a 1% decrease in the number of homes sold in March and a 12% decrease from the same time the year before.
Source: MoxiWorks Home Sales Predictor May-Jun '22
In May we predict there will be 594k home sales which would be a 10% increase from May (albeit a 3% decrease from 2021).
In June we expect another 4% increase in home sales with 620k home sales. While that’s a pretty decent jump back up from April, it’s actually a 12% decrease from June 2021. Even with that decrease, pre-pandemic we historically averaged 557k home sales in June so that’s an 11% increase over historic rates. So what does all of this mean amidst continued synching of the inventory belt, rising inflation and overall concerns of a recession?
“Inventory will continue to be a problem. Construction has not kept up in the last decade which means supply & demand will remain out of balance. Even with interest rates and other effects from the economy dampening demand, it will not dampen it enough for supply to beat out demand because we’ve underbuilt for a decade. Ultimately, we’re not going to have another ‘08, ‘09, ‘10.” — York Baur, MoxiWorks CEO
“2022 won’t bring us a 2008, but it won’t be 2021 either. Transactions might be slowing down, but home prices are not. And inventory remains tight. Since interest rates have gone up, many homeowners are sitting on houses that are worth way more than when they bought them. They also have incredibly low loans so the incentive to sell and move up isn’t there because they would lose out on the historically low interest rates they currently have. So it’s both creation of housing, and also people deciding to sell that will continue to impact inventory.” — Cass Herrin, MoxiWorks Director of Data Services
So what’s the advice for agents right now? Now is the time to nurture your sphere. With all of this impending it will likely become increasingly difficult to find new listings, and buyers for those new listings, while the market shakes itself back out. If your clients are in a good place to sell, tell them. Are your clients in a place where they can afford some investment properties elsewhere? Tell them. Be their guide and help them not miss out on a good opportunity.
Tell us, what’s it like in your market. Are things starting to cool or is it still blazing?
See you next month!
The Home Sales Predictor is a set of prediction data that dives into the number of presentations created and the correlated number of U.S. home sales. This data is provided by MoxiWorks with insights from their MoxiPresent product.