For the week of August 22, 2022
EXISTING HOME SALES CONTINUE TO DIP
βA diamond is merely a lump of coal that did well under pressure.ββHenry Kissinger, German-born American politician, diplomat, and geopolitical consultant
WATCH THIS MARKET PULSE ON YOUTUBE
Existing Home SalesΒ slipped for the sixth straight month in July.Β But the good news was, median prices fell 2.4%, inventory continued to rise, and demand was strong, with 82% of homes sold in less than a month.Β
The median existing-home sales price climbed 10.8% from one year ago to $403,800 (July 2021 = $3,64.600). Thatβs down $10,000, however, from last monthβs record national high of $413,800.
The inventory of unsold existing homes rose to 1.31 million by the end of July, or the equivalent of 3.3 months at the current monthly sales pace.Β
All-cash sales accounted for 24% of transactions in July, down from 25% in June, but up from 23% in July 2021.
Housing StartsΒ dropped in July. Starts for single-families are down 18.5% yearly, but up 17.4% for buildings with 5 units or more.Β Building Permits are down 11.7% annually for single-families, up 26.2% for 5+-unit buildings.
Freddie Mac notes:Β βInflation appears to be beyond its peak, which has stopped the rapid increase in mortgage rates,βΒ forecasting βsupply will modestly increase, and home price growth will decelerate.β
Economic Notes
UK economy shrank record 11% in 2020, worst since 1709, updated figures show today.
Chinese banks cut rates to spur economic growth. Β The CCP wants banks to lend cheaper money to increase growth quickly.
US Stock Markets tanking for the beginning of the week with midday trading down about 2% for all three major indices.
ΒIt now costs $300,000 to raise a child according to a Brookings Institution analysis.
Inverted Yield Curve Watch
30 Year Treasury Yield: 3.233%
10 Year Treasury Yield: 3.029%
5 Year Treasury Yield: 3.18%Β
2 Year Treasury Yield: 3.201%
The 10 year treasury bond yield climbs above 3% for the first time since June, 2022.
Public Service Announcement:Β
If you have tried to buy a home in the last three years but kept getting beaten by hedge funds and their cash offers, hereβs what my buyers can expect in the current market:
1. Getting an offer accepted under list price.
2. Getting the seller to pay for your closing costs or buy down your mortgage rate.
3. Getting the seller to actually make repairs or give repair credits for bad inspections.
Many of todayβs agent got into the business over the past couple years as the market was extremely hot. Iβve been practicing real estate for eight years and our team at Dove & Associates has a combined experience of over 65 years. Β Weβre fortunate to have a solid foundation who has seen decades of market shifts, and we know what it takes for all of our clients to success in changing markets.
Some other things to keep in mind in this market:
1. Buying right now may be a bad choice for some of you. Β Even though though this will cost me money to tell you that, I will if youβre someone it will not benefit.
2. For those who are paying insane rent, buying with little out-of-pocket and under list price will save you money monthly.
3. Interest rates have gone up but I can actually get the seller to pay for you to buy your rate down so that your monthly payment is much cheaper.
4. If you are current or former military who can get a VA loan, now is your time. With our VA program, you can buy a house with literally $0 out of pocket. Not a penny!
If you have any questions about this please call or text me:
Jordan Dove S.0180594
(702) 767-5557
The current absorption rate for the Southern Nevada market the past four weeks is 22.87%, down -0.30% from last week's absorption rate.Β 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 sellerβs market, whereas an absorption rate below 15% signals a buyerβs market.Β
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: $450,000Β (Down from July of $465,000)
Condo: $243,000 (Up from July of $238,978)
Townhouse: $325,000 (Down from July of $329,000)
TheΒ past 23 weeks have seen an increase of residential resale inventory available on the open market in Southern Nevada. Β Chart below shows total available inventory to total weekly closed sales.
As of August 22, 2022, there are currently active (%βs compared to 7/25/22):
8,299 Single Family Homes +9.89%
1,111 CondosΒ +10.00%
753 TownhousesΒ +13.06%
278 Manufactured HomesΒ +7.34%
444 High Rise UnitsΒ +/- 0.00%
101 Multiple DwellingsΒ -7.34%Β
2,543 Parcels of LandΒ +7.53
3,037 Rentals On MarketΒ +15.83
Past Seven Days Market WatchΒ (%βs compared to 7/25/22):
1,201 New ListingsΒ -13.03%Β
233Β Back On MarketΒ -2.10%Β
70 Price IncreasesΒ -12.50%
1,630 Price DecreasesΒ -14.44%
871 Accepted an OfferΒ +8.33%
638Β SoldΒ -1.70%Β
86 ExpiredΒ +34.38%Β
492Β Β Taken Off MarketΒ +11.56%Β
87* Β properties are coming soonΒ +1.14%Β
This week, there are 136Β more active residential resale properties on the market compared to one week ago for a total of 10,986, an increase of 1.25%.Β
*Properties coming soon do not indicate all of the upcoming properties. Β These are listing that are entered into the MLS prior to list date.
Prices in theΒ Southern Nevada real estate market are STALLING. Β This is good news because Buyers are still active in the market, and we have access toΒ those buyers. Β If youβre considered selling your home, Β letβs connect today so we can discuss your options and come up with a plan that is custom fit to your goals. Β Call (702) 767-5557
WINNING STREAK OVER...Four weeks of stock market gains came to an end asΒ negative economic data and hawkish comments from Fed members sent all three major indexes decidedly south.The housing data above and below was accompanied byΒ July Retail Sales unchanged from June, a record low read on New York region manufacturing sentiment, and growing Initial Unemployment Claims.Β Β Β Β With all that, the St. Louis Fed President said he was leaning to a 75-basis-point (0.75%) hike in September, whileΒ the Minneapolis Fed President said he doesn't know if the Fed can reduce inflation without triggering a recession.The week ended with the Dow down 0.2%, to 33,707; the S&P 500 down 1.2%, to 4,228; and the Nasdaq down 2.6%, to 12,705.Bond prices were hit hard, the 30-year UMBS 4.5% down 0.92, to $100.10.Β Appearing to stabilize, the national average 30-year fixed mortgage rate declined 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 KNOWβ¦Β For the first time since the height of the pandemic two years ago,Β the National Association of Home Builders sentiment index fell below 50 in August, indicating more builders see conditions as poor, rather than good
NEW AND PENDING HOME SALES SLIP, INFLATION SLOWS, GDP DOWN...JulyΒ New Home SalesΒ are forecast off a bit, same as theΒ Pending Home SalesΒ index of signed contracts on existing homes. Inflation by the Fed's favoriteΒ PCE PricesΒ index should be up just slightly, and theΒ GDP-Second EstimateΒ is expected to show the economy is still contracting.
If youβre buying a home, hereβs what you should know about yourΒ home inspectionΒ and why itβs so important.
AΒ home inspectionΒ is a crucial step in the homebuying process. It assesses theΒ conditionΒ of the home you plan to purchase so you can avoidΒ costly surprisesΒ down the road.
Letβs connect so you have anΒ expertΒ on your side to guide you through the process.
Forecasting Federal Reserve policy changes in coming months.Β The Fed Funds futures market expects the central bank to ease up on their rate hikes by the end of the year.Β 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%. Β After review of the Fed minutes from the last meeting, the Fed said last week that they will continue to raise rates until inflation is near the target of 2%.
AFTER FOMC MEETING ON: Β Β Β CONSENSUS
Sep 21 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 2.75%-3.00%
Nov 2 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 3.25%-3.50%
Dec 14 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 3.50%-3.75%
Probability of change from current policy:
AFTER FOMC MEETING ON: Β Β Β CONSENSUS
Sep 21 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 100.0%
Nov 2 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 72.1%
Dec 14 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 61.4%