🏘 Market Pulse - MARKET STALLING?
For the week of August 15, 2022
For the week of August 15, 2022
REAL ESTATE MARKET STALLING?
Quote of the week:
“You must be the change you wish to see in the world.” - Gandhi
WATCH THIS MARKET PULSE ON YOUTUBE
National Market Update
Realtor.com reports active inventory continues to grow, up 30% from a year ago. This jump in supply gives today’s shoppers an extra home to consider for every three that were on the market this time last year.
Freddie Mac tells us: “Declines in purchase demand continue to diminish while supply remains fairly tight….The consequence is that house prices likely will continue to rise, but at a slower pace for the rest of the summer.”
Home price growth may be slowing, yet the National Association of Realtors reports 148 of 185 metros still saw double-digit annual price growth in the second quarter—that’s 80% of the markets, up from 70% in the first quarter.
National Economic Notes
Consumer Price Index (CPI) reports consumer prices rose 8.5% in July, less than expected as inflation pressures ease a bit.
Reports show inflation from June, 2022 - July, 2022 saw a 0% change in inflation month-to-month.
Food inflation data in the United States hit 10.9% in July, the highest since May of 1979. The food at home index rose 13.1% and away from home was up by 7.6%
Second Quarter 2022 GDP numbers had a negative growth rate of -0.9% signaling two consecutive quarters of negative growth. This is the definition of a recession.
INVERTED YIELD CURVE WATCH:
30 Year Treasury Bond Yield 3.099%
10 Year Treasury Bond Yield 2.788%
5 Year Treasury Bond Yield: 2.912%
2 Year Treasury Bond Yield: 3.201%
Local Market Update (Southern Nevada)
Note: Updated statistics will be compared to four weeks ago. Real estate statistics can be misleading when comparing data from the end of the month to the beginning of the month. The majority of homes close at the end of the month, which can create a large dip when comparing to the first week of the next month. Therefore, statistics will be based on the same week four weeks ago so we are comparing the data to the same time frame from the preceding month.
The current absorption rate for the Southern Nevada market the past four weeks is 23.17% - down -1.58% from last week's absorption rate. For context, 6+ months ago, the absorption rate was over 100%.
A market with an absorption rate at or above 20% is typically called a seller’s market, whereas an absorption rate below 15% signals a buyer’s market.
Each week we will update the current median price for the current month. Keep in mind the majority of sales occur at the end of the month, so official numbers will be published on the first Monday of each month.
Current August Median Prices:
Single Family: $450,000 (Down from July of $465,000)
Condo: $245,000 (Up from July of $238,978)
Townhouse: $327,000 (Down from July of $329,000)
It’s interesting to note that Condo median is UP thus far from July, while SFR and TWH are down. I believe this has to do with housing affordability, and home shoppers and investors are opting for the lower priced condos as rents are still at a premium with a lower-entry cost of ownership .
The past 22 weeks have seen an increase of residential resale inventory available on the open market in Southern Nevada. Chart below shows total available inventory to total closed sales.
As of August 15, 2022, there are currently active (%’s compared to 7/18/22):
8,215 Single Family Homes +14.49%
1,085 Condos +11.63%
736 Townhouses +19.52%
273 Manufactured Homes +9.64%
442 High Rise Units +4.00%
99 Multiple Dwellings -4.81%
2,493 Parcels of Land +8.67%
2,945 Rentals On Market +13.97%
Past Seven Days Market Watch (%’s compared to 7/18/22):
1,220 New Listings -13.54%
237 Back On Market -4.05%
97 Price Increases +7.78%
1,903 Price Decreases +6.37%
854 Accepted an Offer +3.89%
546 Sold -18.14%
86 Expired +48.28%
521 Taken Off Market +26.46%
86* properties are coming soon -41.67%
This week, there are 161 more active residential resale properties on the market compared to one week ago for a total of 10,850, an increase of 1.51%.
*Properties coming soon do not indicate all of the upcoming properties. These are listing that are entered into the MLS prior to list date.
Prices in the Southern Nevada real estate market are STALLING. This is good news because Buyers are still active in the market, and we have access to those buyers. If you’re considered selling your home, let’s connect today so we can discuss your options and come up with a plan that is custom fit to your goals. Call (702) 767-5557
Review of Last Week
INFLATION DOWN, STOCKS UP...The annual rates of both consumer and wholesale price inflation dropped in July. Hoping inflation has turned the corner, investors sent stocks north, big time.
Unfortunately, the Consumer Price Index, at 8.5% year-over-year, and the Producer Price Index, at 9.8%, are still elevated compared to almost any time in history, and miles above the Fed's 2% inflation target.
But Wall Streeters felt the Fed will now go easier on rate hikes, and were buoyed by University of Michigan Consumer Sentiment at a better-than-expected 55.1, though still historically low and well under its 70.3 read a year ago.
The week ended with the Dow UP 2.9%, to 33,761; the S&P 500 UP 3.3%, to 4,280; and the Nasdaq UP 3.1%, to 13,047.
Bonds overall moved higher, the 30-year UMBS 4.5% UP 0.74, to $101.02. After falling for the three straight weeks, the national average 30-year fixed mortgage rate made a small jump up in Freddie Mac's Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW… A national online listing site reports that “stale” listings—homes listed longer than a month—grew to 61.2% in July, up 12.5% from a year ago, the first annual gain since the start of the pandemic.’
This Week’s Forecast
HOME BUILDING, EXISTING HOME SALES SLIP, RETAIL SALES SLOW, FED MINUTES...Analysts expect Housing Starts and Building Permits will slide for July and Existing Home Sales will drop below 5 million units a year. July Retail Salesare forecast up just a tick, scaling back from their growth in June. We'll scrutinize FOMC Minutes from the Fed's July meet to gauge their view of future rate hikes and the economy.
Real Estate News
Home Builders See ‘Housing Recession’ as Builder Sentiment Index Drops Further in August
China’s Housing Market Troubles Need a ‘Holistic Solution,’ says HSBC
Las Vegas: Take a Look Inside Raiders Coach Josh McDaniels’ new home - PHOTOS
Las Vegas Housing Market Gets Slight Break as Mortgage Rates Dip
Many people remember the housing crash in 2008, but experts say today’s market is fundamentally different in many ways.
First, there isn’t an oversupply of homes for sale today. Plus, lending standards are much tighter, and homeowners have record levels of equity. That means signs say there won’t be a wave of foreclosures like the last time.
If you have questions about the housing market, let’s connect
FED RESERVE WATCH
Forecasting Federal Reserve policy changes in coming months. Fed watchers now expect a half percent rate hike at the next two meetings, followed by a quarter percent kicker for the year’s last move. Note: In the lower chart a 100.0% probability of change is a 100.0% probability the rate will rise. Current rate is 2.25%-2.50%.
AFTER FOMC MEETING ON: CONSENSUS
Sep 21 2.75%-3.00%
Nov 2 3.25%-3.50%
Dec 14 3.50%-3.75%
Probability of change from current policy:
AFTER FOMC MEETING ON: CONSENSUS
Sep 21 100.0%
Nov 2 66.1%
Dec 14 67.0%