The market from January through June 30, 2021

The National Association of Realtors has released their nationwide housing statistics for the month of June.  As you can see, the 1970’s song from the 5^th Dimension is playing all across the country… “Up, Up and Away in my Beautiful Balloon…”

We are not the only region experiences high buyer demand, multiple offers and rising prices.  Many areas of the country that had never before heard of Multiple Offers are now experiencing the competitive process.  One of my daughters just bought her first home outside of Philadelphia.  The Real Estate community has only experienced the competitive offer situation for about 5 months and they are baffled as to how to properly handle it.

When will it stop?  How high can it go?

Those are the two most common questions asked by Agents and Clients.  We have already seen a return to our normal market pattern.  First of all, price appreciation has returned to its normal pattern.  I outlined last month that pattern:

Part of that normal rhythm is the timing of seasonal activity in the market and the timing of appreciation seen in housing prices.  In a normal market, if there will be appreciation in value, it will manifest as a quantum leap early in the year.  Then it begins to level out mid-spring, and level out during the rest of the year. 

This graph of month over month appreciation demonstrates that pattern and answers the question of “How high can it go’” at least for the rest of this year.

To answer the question of “When will it stop”, it already has, temporarily.  Last month I described the usual summer pattern of our market:

Our spring market typically begins to slow towards the end of May as families go on vacation, plan for summer camps for the kids and go to graduations.  It will be interesting to see what happens this summer.  Airlines are booked, hotels are booked and National Parks are seeing unprecedented levels of reservations.  It looks like everyone is hoping for a post-COVID getaway!

Yep, this is exactly what we have seen through June and the beginning of July and will likely continue through the middle to end of August.  But let’s be clear, this has not caused any weakness in the market.  There is slightly less inventory right now (less competition for Sellers), and fewer buyers in town (less competition between Buyers).  However, that does not translate to market softness.  It means that appropriately priced homes are selling at the current price levels with 3-4 offers instead of 12-15 offers.  And there is a lot of inventory poised to hit the market in late August, which is expected. 

Now our Local Market:

Year to Date Unit Volume Sold is on the rise.

-      Our entire market is up 79% in Unit Volume Sold Year to Date over last year to date.  We have actually exceeded our normal inventory and yet, demand remains high and competitive offers the norm.

The Median Price is UP and beginning to flatten.

-      Our entire market is up 18% in Average Price and 24% in Median Price Year to Date over last year to date.  This is expected to remain pretty much the same for the rest of the year as discussed above.

Last year, we opined that Real Estate would be the industry to lead the country out of the pandemic induced recession rather than being a contributing factor as in 2006-2006.  That certainly seems to be the case as Real Estate has created a tremendous amount of wealth in the last year.  There is, of course, uncertainty in the marketplace concerning inflation, interest rates and another wave caused by the Delta Variant.  We will see how those factors play out through July and will discuss them next month.

Until next month, stay safe and healthy.