By Mike Bodeen · 29 June 2020
We’ve been writing our Monday Market Snapshot for six years now, about the time that my son and business partner, Jonathan, came on board to greatly assist me in the business.
We know the bottom of the market (price-wise) occurred in 2011, and we’ve hit a few periods of slow growth and hot spells since then as well. Being naturally curious, I wondered what our market looked like back in 2014 compared to the present. So I went back into the Bodeen archives. Here’s a copy of a few sentences that I wrote back then:
“We’re seeing another market correction that attempts to fill the vacuum caused by the consequences of our hot rental/slow resale market. Rents will continue to increase, which landlords are thrilled about and renters not so much. This often gets the resale market in gear when people can actually see that home ownership is more cost effective than renting. On that note, due to the continued sluggish economy, mortgage rates have been dropping again, now down in the low 4% range for the typical 30 year fixed rate product.”
Of interest was that we were reporting on rental market price increases back then, which haven’t stopped yet! We also stated the possibility that as rents rise, renters would determine it’s better to own than rent, quickening them to become buyers and strengthening the sales market.
Finally, we were no doubt thrilled back then that the 30 year mortgage rate had dropped into the low 4% range. And today? The low 3% range. Amazing.
Law of Supply and Demand – An Interesting Chart!
This Cromford Report Supply and Demand Index chart is interesting. We’ve been talking about and suffering through an inventory (supply) problem for nine years now. The supply index (red line) last normal time was in 2011, which was the bottom of the market.
The Demand Index has remained fairly normal since 2015 except for this year which dropped during the Spring COVID-19 stay-at-home order and is now re-surging. It is still way above the supply-line.
2014 was the last time that our market’s supply and demand was anywhere near balanced together.
Market data referenced in this article comes from The Cromford Report.