By Mike Bodeen · 30 July 2018
If we’re a property owner, we cheer the decreasing inventory of homes for sale, knowing that as buyer demand remains constant or grows, prices rise.
On the other hand, if we’re a prospective buyer in this same market we lament the continued stream of bad news on an almost monthly basis that the number of homes for sale has again decreased (see chart), while the median and average home sales price per square foot (psf) continues to rise. (see charts)
To make matters worse, the 30 year mortgage rate has increased from 3.9% one year ago to 4.5% currently. This same mortgage rate was 3.5% in June of 2016!
Listing inventory decrease + home price increase + mortgage rate rises = the buyer triple whammy.
But wait, If we’re a renter, the buyer triple whammy now becomes a buyer quadruple whammy!
For 9 years, prior to 2014, rental rates were flat (.68 cents per SqFt), but then the average rental price per square foot began to take off (see chart). The rental psf is now .93 cents – a rise of 37% in 4 years.
The Buyer Quad Whammy – you heard it here first folks!