🏘 Market Pulse - Sellers Drop Prices
For the week of July 18, 2022
Sellers Drop Prices
“Opportunity is missed by most people because it is dressed in overalls and looks like work.”—Thomas Edison, American inventor and businessman
Local Las Vegas Statistics based on the past week moving averages
A national database reports roughly three out of four markets saw at least 25% of listed homes drop their prices in June. The housing cooldown is making sellers adjust prices so their homes still sell in a reasonable amount of time.
More purchase contracts are including inspection and appraisal contingencies. As evidence of this, an online database reports 14.9% of contracts were canceled in June, the most since the start of the pandemic.
Builder confidence plunged in July as high inflation and increased interest rates stalled the housing market by dramatically slowing sales and buyer traffic. In a further sign of a weakening housing market, builder confidence in the market for newly built single-family homes posted its seventh straight monthly decline in July, falling 12 points to 55, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. This marks the lowest HMI reading since May 2020 and the largest single-month drop in the history of the HMI, except for the 42-point drop in April 2020.
Fannie Mae’s Home Purchase Sentiment Index fell again. More people think it’s a good time to buy, while fewer feel it’s a good time to sell. A negative note: an all-time high 81% of consumers say the economy is on the “wrong track.
The average rate on a 30-year home loan was 5.3 percent as of last week, down from 5.7 percent the week before but up from 2.9 percent a year ago, mortgage-finance giant Freddie Mac reported.
In Southern Nevada, home sales have been sliding, inventory has shot higher, and more sellers have been slashing prices in recent months as buyers face increased borrowing costs.
On the resale side, about 2,670 single-family homes traded hands in June, down 8 percent from May and the third consecutive month-to-month drop, according to Las Vegas Realtors data.
Nearly 5,750 houses were on the market without offers at the end of June, up from around 1,740 as recently as February.
Nationally, about 60,000 home-purchase agreements fell through last month, comprising almost 15 percent of homes that went under contract in June, real estate brokerage Redfin reported.
That was the highest cancellation rate since March and April of 2020 “when the housing market all but ground to a halt due to the onset of the coronavirus pandemic,” the firm noted.
Redfin said last month it was laying off around 470 employees, comprising some 6 percent of its workforce, and warned that home sales could be down for years.
Housing markets are prone to ups, downs and other shifts, especially in Southern Nevada, where the past 20 years of home prices comprise nothing short of a stomach-churning roller-coaster ride.
The past 18 weeks have seen consistent growth of properties coming on the resale market.
As of July 18, 2022, there are currently active (%’s compared to 1 weeks ago):
7,175 Single Family Homes +6.74%
972 Condos +4.40%
621 Townhouses +4.19%
249 Manufactured Homes -1.97%
425 High Rise Units +0.98%
104 Multiple Dwellings +9.68%
2,294 Parcels of Land +0.70%
2,584 Rentals On Market -0.50%
Past Seven Days Market Watch (%’s compared to 1 week ago):
1,411 New Listings -3.75%
247 Back On Market -9.52%
90 Price Increases -6.25%
1,789 Price Decreases +2.64%
822 Accepted an Offer -4.20%
667 Sold -7.87%
58 Expired +5.45%
412 Taken Off Market -8.04%
110* properties are coming soon -27.63%
As of July 18, 2022 there are 535 more active residential resale properties on the market compared to one week ago, an increase of 5.90%.
*Properties coming soon do not indicate all of the upcoming properties. These are listing that are entered into the MLS prior to list date.
The market is shifting quickly back a Buyer’s market. Home prices are still high, and inventory has increased, giving home shoppers more choices. My team is here to help with guaranteed results, call or e-mail me with any real estate questions.
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UP FINISH TO A DOWN WEEK... Stocks rallied Friday, but not enough to offset earlier losses. The three major indexes ended down for the week on fears inflation would push the Fed to bigger rate hikes and cause a recession.
The Consumer Price Index (CPI) went up 1.3% in June, pushing the annual rate of inflation to 9.1%, a 41-year high. Economists said a 100-basis-point (1%) Fed rate hike was now in play, and that spurred the recession worries.
Friday, we saw Retail Sales head up 1.0% in June to an 8.4% annual rate. That gain was wiped out by the 9.1% inflation, but at least the report shows consumers haven't been turned off by higher prices just yet.
The week ended with the Dow down 0.2%, to 31,288; the S&P 500 down 0.9%, to 3,863; and the Nasdaq down 1.6%, to 11,452.
With stocks retreating, bond prices advanced, the 30-year UMBS 5.0% up 0.03, to $101.19. Yet the national average 30-year fixed mortgage rate shifted back 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 report from the Fed says it was the surge in demand—not lack of supply—that sent home prices skyward the last two years. But economists point out we still haven’t built enough homes to meet the growth in households.
HOME BUILDING GROWS, EXISTING HOME SALES DIP, JOBLESS CLAIMS HOLD... Builders are expected to report increased activity, with both Housing Startsand Building Permits up in June. But Existing Home Sales are forecast to slip a bit for the month, while Initial Jobless Claims should stay where they've been.
Forecasting Federal Reserve policy changes in coming months. Fed watchers now think we'll see a 75-basis-point (0.75%) hike at the next two FOMC meetings, followed by a smaller gain in November. Note: In the lower chart a 100.0% probability of change is a 100.0% probability the rate will rise.
AFTER FOMC MEETING ON: CONSENSUS
Jul 27 2.25%-2.50%
Sep 21 3.00%-3.25%
Nov 2 3.25%-3.50%
Probability of change from current policy:
AFTER FOMC MEETING ON: CONSENSUS
Jul 27 100.0%
Sep 21 63.2%
Nov 2 78.4%