By Mike Bodeen · 9 July 2024
We hope your 4th of July weekend was awesome – in so many ways!
June’s numbers are in and here they are – the ARMLS numbers for July 1, 2024 compared with July 1, 2023 for all areas & types:
Active Listings: 18,121 vs 11,545 last year – up 57% – and up 0.4% from 18,044 last month
Listings Under Contract: 7,402 vs 7,858 last year – down 5.8% – and down 11% from 8,324 last month
Monthly Sales: 6,318 versus 7,456 last year – down 15% – and down 17% from 7,595 last month
Monthly Average Sales Price per Sq. Ft.: $295.39 versus $287.67 last year – up 2.7% – but down 0.8% from $297.79 last month
Monthly Median Sales Price: $450,000 versus $443,000 last year – up 1.69% – and unchanged from $450,000 last month
Monthly Average Lease Price p/SqFt: $1.38 up from $1.37 last year and $1.37 from last month
The Cromford Market Index (CMI) which is a predictor of future trends, had been in a Seller’s Market mode since January of this year (See Chart) into May, marginally maintaining a Seller’s market. In early May it entered into balanced market territory, which measures 90-110 on the CMI scale. Anything over 110 is a seller’s market and anything below 90 is a buyer’s market.
We have recently dropped down, nearing 100, which is the mid-point of a balanced market, but it sure doesn’t “feel” that way.
Why is that, Mike?
Closings are far below normal (down 15% from last year) and are heading lower as we note that listings under contract are down almost 6% from last year and down 11% from last month. Supply is much higher than last year (up 57%), yet demand is not keeping pace, hence, we’re seeing prices soften.
The longer mortgage rates remain elevated, the more pressure will be applied toward price reductions causing lower sales prices. Wise sellers should be taking cue from like-wise professional Realtors about what a “good” offer looks like – not getting too “cute” in their negotiations.
It should also be noted that we’ve entered a slower part of the sales year, so we try not to read too much into falling numbers for the third quarter. Autumn historically changes that, but most likely the Fed’s rate reduction will determine what happens to mortgage rates – not autumn leaves.
For me, one thing seems clear. Apart from the higher rates, which is no small thing, the next few months are buying opportunities. If sellers haven’t reduced their prices yet, they’re thinking about it. We again urge buyers to be bold in their offers.
Once rates begin to drop however, buyer pent-up demand will be unleashed in ever increasing numbers, reversing the trend favoring buyers – and the buyer opportunity window will close – again.
Market data referenced in this article comes from The Cromford Report.