As the Pandemic housing boom fizzled out across the country this summer, we saw inventory jump. In bubbly markets, like Austin and Boise, that inventory jump was greater than 300% between March and August. However, that inventory spike is already fizzling out.
Mortgage interest rates have risen sharply over the last 30 days. The recent change will cost new borrowers over $56 per month for every $100,000 borrowed. Average U.S. interest rates for 30-year fixed rate mortgages were at 6.02% as of this week. Last month at this time, they were sitting at 5.13%.
Not all are created equal. Here are some that just might not pay off.
While the YoY sales drop mirrors the activity in Manatee, the YoY median sales price increase in Sarasota jumped quite a bit higher than Manatee (31% vs 21%). Cash sales dipped a bit in July from the over 50% in Sarasota in June. Also, new listings are not coming on as quickly in Sarasota as they are in Manatee. All of this leads me to believe that prices will be a little more stubborn in Sarasota than Manatee in the short-term. That said, it seems that every month now brings a material change in the market. As with every real estate transaction, both the buyer and seller have to take into account what is best for their unique situations when they examine any potential deal.
The number of single-family homes sold in Manatee were down 22% YoY in July. While the pace is definitely slowing, prices are holding better than one would expect in this scenario (so far). Inventory is coming on the market quickly, and the active inventory is at around three months of sales volume. Both of these are good signs for balancing the market as sellers have dominated for some time now. How this will ultimately impact price is another story. The law of supply and demand will definitely govern, but the backdrop of the broader economy will definitely play a role.