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Today I have another market update for you—complete with the latest numbers in home sales, condo sales, and interest rates, as well as a breakdown of what they mean for you.
Let’s start with single-family homes. Last month, the number of single-family home sales rose 3.5% compared to January 2017. The 12-month rolling average rose 12.1%. The median sales price of single-family homes rose 0.3% last month to $190,500, which is pretty flat but also normal because of the effect of pending sales in December and late November. For the 12-month rolling average, the median sales price rose 6.5% to $207,500.
The number of pending sales of single-family homes rose 25.2% last month, which was a huge jump. This means everyone that came to town to make an offer on something will be closing within the next 30 to 45 days, so you should expect a large sales bump this month. This will also dictate what happens with home values moving forward.
This jump in pending sales made inventory drop. Officially, the level of inventory dropped 20.6% in January 2018 to five months. That’s something I haven’t seen with resale homes since the real estate boom of 2005 and 2006.
With that in mind, we should see fewer homes coming on the market. As we know, when inventory levels are less than six months, it’s a seller’s market. This is why, if you’re a seller, now is a great time to take advantage of our market. At five months, inventory is low but still healthy. Once inventory gets too low, however, buyer fatigue tends to set in.
If you’re a seller, now is a great opportunity to take advantage of our spring market.
Moving on to condos, the number of sales rose 7.2% last month compared to January 2017, and the 12-month rolling average rose 15.9%. The median sales price rose 8.2% compared to January 2017, and the 12-month rolling average rose 6.1%.
The number of pending sales of condos rose 7.4% last month, while inventory dropped 28.6% to five months. We saw in the last few weeks and months that inventory levels for condos were lower than homes, but now, as you can see, they’re even.
Here’s the wild care, though—interest rates are at 4.49% for a 30-year fixed rate, which is the highest it’s been in years. As rates continue to climb, we’ll see fewer buyers come on the market, which could hurt the demand for homes because it limits people’s buying power and their ability to upsize into higher price points.
That’s why, as I said, you need to take advantage of our spring market now if you’re a home seller. Rates are expected to rise all the way up to 4.9% by the end of the fourth quarter of this year. Similarly, if you’re a homebuyer, you want to take advantage of the market now because of this expected rise. The No. 1 mismanaged variable in the home buying process is interest rates. Oftentimes, people don’t take them into account and it costs them thousands of dollars on the back end.
If you have any questions about our market, you want a free home valuation, or you’re thinking of buying or selling a home soon, don’t hesitate to give me a call or send me an email. I’d be happy to help you.
