You may have recently seen articles claiming that the real estate market is cooling off, or slowing down. Let’s see how true that is locally, and what cooling off really means.
You know by how my favorite stat is months of inventory. It lets you know overall how hot the market is. The closer to zero you are, the hotter the seller’s market, and anything above 7 is a buyer’s market.
MOI is 1.5 right now, which means homes are still selling more than twice as fast as they have been over the last 10 years. Which, by the way, was already fast.
So if that’s true, how is it cooling off? Well, the number of homes available for sale has actually increased since April, which was the peak of this year’s real estate frenzy. That’s a great start for buyers, but it’s still down about 60% from what we consider a normal “seller’s market” here, meaning even if it’s inched up, overall inventory is still very low.
On top of that, homes here are still closing at about 2% above asking price on average when the home is priced correctly. In fact, right now 2 out of every 3 homes that sell are selling at or above the asking price.
Finally, national mortgage rates are down again at about 2.8, meaning buyers still have a lot of buying power despite the overall high prices.
The takeaway? Inventory is inching up, but is still miles away from changing market conditions much. Low mortgage rates, a lack of supply, and a large group of people who still want to or need to move are driving the market. The good news as we reach the end of the season is that maybe instead of competing against 15 offers, it will be more like 3 or 4. Only the coming months will tell.