Seasonally, real estate activity has picked up in March 2019 compared to February 2019, with 43.4% more listings, 24.0% more pending sales, and 26.5% more closed sales. However, compared to March 2018, the market has continued to contract with 3.9% fewer listings, 5.4% fewer pending sales, and 7.9% fewer closed sales. We are seeing a shift in the market, where buyers to some degree are digging in their heels and not as willing to pay what sellers have historically been selling their homes for. The market has been softening since about mid-2018.
However, at the same time, inventory decreased from 2.7 months in February 2019 to 2.2 months in March 2019 and total market time decreased to 68 days on market in March 2019 from 75 days on market in February 2019. The twelve months rolling average and median sales price continues to decline significantly – March 2019 compared to March 2018 was an average increase of 4.1% and a median increase of 3.9%; while the 12 months rolling average sales and median price for February 2019 compared to February 2018 was 4.6% and 4.4%.
This is an interesting phenomenon, since active residential listings were 4,808 in March 2019, compared to 3,644 in March 2018 and 3.313 in March 2017. Studying the literature, I note that real estate has been cooling across the country, and it’s not just the winter effect. There has been a definite shift and it appears the market is normalizing and not truly a buyer’s market. What I am reading is this: it is the expectation that sellers will continue to keep their foothold due to low inventory for another year or so, though with weakened negotiation power.
Some of the indications include the concern over mortgage rates, which have risen and fallen in the last year; millennials have been late coming to the purchasing table with generally very high debt levels and a different idea about home ownership; because of price fatigue where buyers are pushing back and saying ‘enough,’ homebuyers have more negotiating power, and sellers are making more compromises; there are more expired and canceled homes in the multiple listing service; there are less unrepresented sellers attempting to sell their home unassisted by a real estate agent; upper-tier markets are softening while demand for entry-level housing remains high; and finally changes in tax law have had a negative effect on the move upmarket..
If you are curious about how these factors may affect the current market value of your home, give me a call. We like to say “Real People. Real Analysis!”