5 Reasons Today’s Housing Market Is Anything but Normal
There are many headlines out there that claim we’re reverting to a more normal real estate market. That would indicate the housing market is returning to the pre-pandemic numbers we saw from 2015-2019. But that’s not happening. The market is still extremely vibrant as demand is still strong even while housing supply is slowly returning.
Here’s the definition of normal from the Merriam-Webster Dictionary:
“conforming to a type, standard, or regular pattern: characterized by that which is considered usual, typical, or routine.”
Using this definition, here are five housing industry metrics that prove we’re nowhere near normal.
If we look at the 30-year mortgage rate chronicled by Freddie Mac, we can see the average rates by decade:
Today, the average mortgage rate stands at 2.87%, which is very close to the historic low.
According to Black Knight, a housing data and analytics company, the average annual appreciation on residential real estate prices since 1995 has been 4.14%.
According to the latest forecast from the National Association of Realtors (NAR), home price appreciation will hit 14.1% this year, which will be greater than any year since Black Knight began collecting this data.
According to NAR:
“Months’ supply refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace. Historically, six months of supply is associated with moderate price appreciation, and a lower level of months’ supply tends to push prices up more rapidly.”
As of the latest Existing Homes Sales Report from NAR, the current months’ supply of inventory stands at 2.6. That’s less than half of a normal supply.
The days-on-market metric gives an indication of how hot a market is and how quickly homes are selling. In 2019, prior to the pandemic, the average days on market stood at 35, according to NAR. Today, that number is cut in half and is now at 17 days.
According to NAR, the number of offers per listing stood at 2.2 in 2019. Today, that number is double at 4.5.
When…
…it’s hard to say we’re in a normal market.
Stay up to date on the latest real estate trends.
Single-family homes continue to be a hot commodity, while condos continue to sit on the market.
Inventory levels are increasing drastically throughout the entire East Bay, with the area seeing over 40% more active listings than this time last year.
If selling your house is on your to-do list this year, the time to start prepping is now. That’s because experts say the best week to list your house is coming up fast.
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Mortgage rates have ticked back up to roughly the same levels, as they were at prior to the Fed issuing its first rate cut in September.
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If you’re willing to roll up your sleeves (or hire someone who will), buying a house that needs some work could open the door to homeownership.
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You’ve got questions and we can’t wait to answer them.