Monday Market Matters
Growth Slows Notable This Week
How is your appetite today?
Are you just a bit hungry for information about our current real estate market?
Well, that’s coming but first, we always like to offer some appetizers to relax our guests before we move on to the main course…and we call them, ‘Tidbits‘…
So, let’s get started:
- Chill: The Stanley cup, TikTok’s fave tumbler, helped its 100-year-old+ parent co earn $750M in sales last year (shoutout: #watertok). Stanley stans say the pricey bottles keep drinks cold for hours (and survive car fires?)
- Be prepared to stop: the US Federal Highway Administration told traffic-sign writers to cut it out with all the jokes (picture: “Get your head out of your apps”), giving ’em two years to stop being funny. Till then, use caution: distracting puns ahead.
- New job alert: dog-poop detective. An Italian city is planning to use DNA tracing to track down (and fine) owners who don’t scoop their pup’s droppings. Classic case of poo-dunnit.
- Don’t worry about wiping this dressing off your lips: Burt’s Bees teamed up with Hidden Valley Ranch on new lip balm flavors like Ranch and Buffalo. They said the collab had “never been done before.” Wonder why…
- SNACK FACT of the DAY If stretched from end to end, the blood vessels in the human body would be long enough to circle the Earth twiceRead more Trivia Time Why did building owners first start playing music in elevators?
- 1) To make the ride seem shorter.
- 2) To make it less awkward for strangers in a close setting together.
- 3) To hide the screams of passengers if the elevator fell.
- 4) To calm nervous passengers.
Answer is at the bottom of this email.
Shall we get to the main course? Never one to disappoint our guests, here we go: We’ve been pretty optimistic about the real estate market growth signals this January. This week those signals slowed notably. Is that from a jump in mortgage rates back close to 7%? Is it from the deep freeze that gripped much of the country? Both?That’s what we’re looking at in this week’s Monday Market Matters… The available inventory of unsold single-family homes rose just a bit to 506,000 available and unsold. There are 7% more homes on the market now than last year at this time. Inventory has been growing vs last year, but that pace slowed this week. |
New Listings: There are 54,000 new listings this week. 10,000 of those are in contract already. That’s just 2% more new listings this week than last year. Inventory growth stalled because new listings growth stalled. We hope that’s just a weather-related blip. Worth keeping an eye on. 
Pending Home Sales: The growth pace of home sales slowed this week too. At 261,000, there are 5% more single-family home sales in the contract pending stage than last year at this time. There were just 1.4% more new contracts started compared to last year. 50,000 new pendings. We’ve been on a much stronger growth pace than that. Fingers crossed that it doesn’t tip negative again. Notably, the coastal real estate markets seem to have performed better this week. California, which escaped the deep freeze weather, had 20% more new contracts started than the same week in 2023.
Home prices are less volatile. At $420,000 the median price of single-family homes is unchanged from last week and up a few percent over 2023. The price of the newly listed cohort is $399,000 right now, which is more than 5% above last year. It sure seems like home prices are on their way to a new all-time high this summer.
Price Reductions:
The current rate of price reductions tells us that there are sufficient buyers for the current inventory, at current prices, and current mortgage rates. Just 31.4% of the active market has felt compelled to take a price cut from the original list price. That’s 80bp fewer than last week and is right in the normal range. If rates jump back over 7%, you’ll see the buyer slowdown in this data very quickly. See the inflection of price cuts in March 2022 in the chart above.
We maintain there are 2 most critical statistics to understand the real estate market. On the buyer demand side, the interest rates. And on the seller or supply side, the months of homes available for sale, or inventory.
So, on the buyer demand side, mortgage rates closed slightly at 6.89%, maintaining the dramatic reversal of rates of the prior 7 months. Just a few weeks ago rates broke over 8% and some economists predicted we were headed higher, and yet here we are almost 1.5% below those levels.
| There are 7% more homes on the market now than last year at this time. (See the chart above).Common sense tells us that as long as inventory remains low, prices cannot go down much. |
What should you and I do?
If it’s the right time for you to buy a house, then it never makes sense to wait
This is always true. If it’s the right time, then take action. That means IF you are qualified and it makes financial sense and you want the lifestyle of owning your home, it never, in my 36-year career has made sense to wait.
What remains constant is if you are looking to buy a home and live there for a while, real estate has been and always will be a great long-term builder of wealth. There is nothing to suggest that is changing… if you can afford the home.
If you want to move or downsize, it’s still a great market to sell…
Investors, if you can find a property that will give you cash flow, this is a great time to get solid cash flow and enjoy the tax benefits of real estate.
Whatever your situation is…let’s find your ‘opportunity’ together.
We are available to chat… go ahead and call, text, or email either of us. We’d love to hear from you.
| Trivia Answer: ANSWER: The correct answer is: 4 To calm nervous passengers.Source: https://bit.ly/3U9qXUC |
Until next week…stay safe… and happy trails to you…
Warmly,
Dean
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Dean & Crystal Souza
Realtor | Broker Associate
Century 21 RE Alliance – Souza Team
916-805-8668 /510-881-1761
DRE 00967442 | 01448392
Focused on the Success of Your Move
