If you look at the headlines being pushed by the media as a result of a report by the National Association of Realtors®, you would think that purchase business has ground to a halt. Headlines like:
Boy, what a bunch of negative information; or so you would be led to believe. What if we just take a minute and see if there is anything we can derive from these statements and view them in a different light?
Pending contracts down over 10% from this time last year, you mean the same time a year ago when most people were not quite becoming aware of how serious the COVID-19 virus was and that it seemed there was no clear message from the scientific community and many government leaders?
Inventory is down 29.5% and far from an “ideal” 5 or 6 month supply of available homes. Really, did anyone really want to put their house on the market at this point? In addition, NAR only talks to the numbers it is aware of, but what about all the units that are available that were NOT offered through the MLS? How many total homes were sold that never appeared on the MLS? Did the MLS and the NAR control the same percentage of transactions or units as it did the year before? And what does “ideal” mean? Not too long ago we were in a buyer’s market and people were complaining there were no buyers and fear of an even worse “shadow inventory” of homes, and 5 or 6 months at what pace of sales makes what ideal?
Interest rates are rising. Well yes, they are higher since the beginning of the year, but they are, in fact, just about exactly where they were this time last year! Since I don’t predict the markets, I’m not certain rates have to go higher or come down lower, but as of now, they are right about the same place as this time last year.
If houses are selling faster and for more money, isn’t that a good thing?
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