It's nearing the end of July and as I'm sure you're witnessing every day, the market continues to cool. We've been paying close attention to the data and we are still feeling confident that this is just a cooling and a soft landing, and not a screeching halt.
Let's take a look at the data.
In June, there were 572K home sales, which is 5% more than we predicted. This is the first time in 5 months the number of home sales has been higher than what we predicted. That was 19% fewer homes than were sold in June of 2021, but, as we'll get into with this month's data, we still believe this is just a reversion to the mean, and a cooling of the market, not a crash or any reason to panic.
"Looking at the data, nothing is indicating that the sky is falling," said Ali Rae Lundberg, MoxiWorks Lead Data Scientist
In July we predict there will be 4% less homes sold than in June with 552K homes sold across the US. And finally, in August we expect to see a 1% increase from July with 559K home sales. These numbers we are seeing are bringing us much more in line with the pre-covid seasonality (see chart below for the comparison).
Sold listings 2016-2022 (Jan - Aug). Source: MoxiWorks
Looking at the chart, we are currently hovering right around where we were in 2018/2019 for total number of sold listings in Q3, but still well above 2016/2017. We'll keep an eye on this, but it's no surprise to see that we've dipped so much for 2020/2021 since those years were the exception not the norm.
"The biggest question that still remains in our minds is if we are the top of inflation & mortgage rate hikes, or if there is a little more to go before we hit that ceiling," said Cass Herrin, Director of Data Services, MoxiWorks. "The housing market doesn't like uncertainty just like most markets don't like uncertainty, but looking at the data there is no need to panic."
We've been saying it for months, but while the national headlines are important to be aware of, what really matters is what's happening in your local market. That's what your clients need to be focused on. Remain the expert in your local market. Are prices dropping? Is there more room for negotiation? Help them navigate the climate in their market.
Yes the days of insanely quick sales may be gone, but the market has not dried up and people still need to buy and sell their homes. Stick to your fundamentals. Be the expert and you will make it through this cooling period and come out better on the other side.
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.
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