👻 HOME SALES STAY SPOOKY🎃 JD'S MARKET PULSE
For the week of Monday October 31, 2022
HOME SALES STAY SPOOKY 👻
HAPPY HALLOWEEN! BE SAFE & HAVE FUN!
Check out the HISTORY of Halloween
WATCH THIS UPDATE ON YOUTUBE:
NATIONAL MARKET UPDATE
New Home Sales fell 10.9% in September, now 17.6% below where they were a year ago. With rising mortgage rates and higher prices, the problem is declining affordability. The median price is up 13.9% from a year ago.
The Pending Home Sales index of signed contracts on existing homes dropped 10.2% in September for the fourth straight month. The National Association of Realtors observed: "Persistent inflation has proven quite harmful to the housing market.”
The median sales price of existing homes in the United States, last updated October 20, 2022 for the month of September dipped to $384,800, down from its June peak of $413,800, a decrease of 7.01%.
Month-over-month, contract signings pulled back in all four major U.S. regions, and pending sales decreased in all regions compared to one year ago.
However, affordability is improving. For the second month in a row, the Case-Shiller and FHFA home price indexes fell in August, hitting the fastest pace since 2010-2011. They’re still up annually, Case-Shiller, 13.0%, and FHFA, 11.9%. This means with prices coming down to compensate for the higher rates, we should see affordability start to rise if mortgage rates can remain stable.
DID YOU KNOW… Homebuyers seeking rate relief are turning to adjustable-rate mortgages (ARMs) to reduce their monthly mortgage payments. ARMs accounted for 12.8% of all mortgage applications last week, a 14-year high.
Are you preparing for the opportunities that will arise in this downturn real estate market? We laid out the entire playbook for you to start to prepare for an opportunity that only happens about every 15-20 years.
ECONOMIC NOTES
U.S. GDP accelerated at a 2.6% pace in Q3, better than the expected estimate of 2.3% as growth turns positive. A narrowing trade deficit and increases in consumer spending and government outlays boosted this number.
A sharp pullback in housing subtracted from the number, part of a broader decline in private investment. Consumer spending decelerated, increasing at just a 1.4% pace in the quarter, down from 2% in Q2.
Key inflation gauge (PCE) for the Fed rose 0.5% in September, in line with expectations. Including food and energy, PCE inflation rose 0.3% for the month and 6.2% on a yearly basis.
Personal spending rose 0.6%, more than expected amid the rise in prices, however, increased consumer spending on credit is rising. Compensation costs increased 1.2% in the third quarter, along with estimates.
INVERTED YIELD CURVE WATCH
30 Year Treasury Yield: 4.196% (Last week’s reading: 4.36%)
10 Year Treasury Yield: 4.073% (Last week’s reading: 4.215%)
5 Year Treasury Yield: 4.248% (Last week’s reading: 4.341%)
2 Year Treasury Yield: 4.499% (Last week’s reading: 4.503%)
SOUTHERN NEVADA HOUSING MARKET UPDATE
Southern Nevada Absorption Rate remains below 20% for the second consecutive week.
19.33%
The current absorption rate for the Southern Nevada market the past four weeks is 19.33%, down 0.64% from last week's absorption rate. This is the second time in consecutive weeks that the Absorption Rate Figure (ARF) has remained BELOW the 20% mark. This marks four consecutive weeks of a decline and a decrease in 12 of the last 14 readings. For much of 2021 and early 2022, 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 OCTOBER 2022 MEDIAN PRICES
Single Family
$440,000 (-$10,000)
(Down from September of $450,000)
Condo
$225,500 (-$4,500)
(Down from September of $230,000)
Townhouse
$325,000 (+$5,000)
(Up from September of $320,000)
This week shows another week of a decline in inventory. This week marks the 3rd time in 5 weeks that inventory shows a weekly decline. However, the past 29 of 32 weeks have seen an increase of available inventory. Chart below shows total available inventory to total weekly closed sales. (Last updated October 31, 2022)
As of October 31, 2022, there are currently active (%’s versus 1 weeks ago):
8,512 Single Family Homes (-63) -0.73%
1,113 Condos (-17) -1.50%
775 Townhouses (-5) -0.64%
312 Manufactured Homes (-5) -1.58%
446 High Rise Units (-3) -0.67%
97 Multiple Dwellings (+5) +5.38%
2,716 Parcels of Land (+19) +0.70%
3,651 Rentals On Market (+61) +1.70%
Past Seven Days Market Watch (%’s versus 4 week ago):
749 New Listings (-265) -26.13%
204 Back on Market (-18) -8.11%
76 Price Increases (+9) +13.43%
1,434 Price Decreases (-357) -19.93%
610 Accepted an Offer (-77) -11.21%
530 Sold (-32) -5.70%
147 Expired (+26) +21.49%
480 Taken Off Market (-32) -6.25%
47* properties are coming soon (-3) -6.00%
This week, there are 76 less active residential resale properties on the market compared to one week ago for a total of 11,268 (-76), a decrease of 0.73%.
*Properties coming soon do not indicate all of the upcoming properties. These are listing that are entered into the MLS prior to list date.
FEATURED LISTING
REVIEW OF LAST WEEK
THE RALLY ROCKS ON... The three major stock indexes surged again for the week, fired by investor expectations that the Fed would shift to smaller rate hikes after this week's meeting.
However, all was not copacetic, as Core PCE inflation rose in September, Consumer Confidence fell thanks to rising food and gas prices, and corporate earnings from some big tech companies disappointed.
But a bunch of blue-chip companies delivered good Q3 earnings and guidance, personal income and consumer spending edged up, and the initial Q3 GDP read showed moderate 2.6% growth after two straight quarters of contraction.
The week ended with the Dow UP 5.7%, to 32,862; the S&P 500 UP 4.0%, to 3,901; and the Nasdaq UP 2.2%, to 11,102.
Anticipating a Fed slowdown in rate hikes, bonds also soared, the 30-year UMBS 5.5% UP 1.76, to $99.03. Nevertheless, the national average 30-year fixed mortgage rate gained fourteen basis points (0.14%) 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.
THIS WEEK’S FORECAST
CONSTRUCTION SPENDING, MANUFACTURING, SERVICES, JOBS, THE FED… Yes, this week has everything. Construction Spending is expected off a bit for September, but we'll watch the residential number. The ISM Manufacturing and Non-Manufacturing Indexes are forecast to drop but still show expansion (manufacturing just barely). Nonfarm Payrolls for October may slip and the Fed's FOMC Rate Decision should be another big rate hike on Wednesday.
Even with higher mortgage rates, the mortgage process doesn’t need to be something you fear. Here are some steps to help as you set out to buy a home.
Know your credit score and work to build strong credit. When you’re ready, lean on the pros and connect with a lender so you can get pre-approved and begin your home search.
Any major life change can be scary, and buying a home is no different. Let’s connect so you have an advisor by your side to take fear out of the equation.
FEDERAL RESERVE WATCH
Forecasting Federal Reserve policy changes in coming months. Wall Street expects a three-quarter-percent rate hike on Wednesday, but then half percent hikes in December and February. Note: In the lower chart a 79.0% probability of change is a 79.0% probability the rate will rise. Current rate is 3.00%-3.25%.
AFTER FOMC MEETING ON: CONSENSUS
Nov 2 3.75%-4.00%
Dec 14 4.25%-4.50%
Feb 1 4.75%-5.00%
Probability of change from current policy:
AFTER FOMC MEETING ON: CONSENSUS
Nov 2 79.0%
Dec 14 91.0%
Feb 1 61.9%
With gratitude,
Jordan C. Dove, ABR® SFR®
MANAGING PRINCIPAL | REALTOR®
Dove & Associates Powered by Nationwide Realty
702.767.5557 | Jordan@DoveandAssociates.com
JordanDove.com | DoveandAssociates.com
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3960 E. Patrick Ln. Ste. 204
Las Vegas, NV 89120
NV Lic. # S.0180594
