Prepare For MAJOR CHANGES AHEAD in the Housing Market

Prepare For MAJOR CHANGES AHEAD - Housing Market Craziness

Change is constant. Especially when you look at the real estate market. 

It’s the end of the year. We had the self anointed smartest guys in the room telling us that the housing market was going to go down in 2023. It didn’t. And they are telling us more of the same that it’s going to go down in 2024. 

But the real estate market just took some of the biggest blows one could throw at it. 13 year record low in housing sales. Highest interest rates we have seen in more than two decades. A high inflation environment with slowing economic growth. 

So what’s the data saying about the market ahead? Is it a cautionary tale ahead? 

Real quick. My name is Jeff Chubb and I am a retired investment banker turned real estate agent that has sold more than a 1,000 homes. If you have real estate questions, then I am here to help. 

It’s a smaller subset of data, but the most recent nonetheless. I took the sales from December 1st through December 19th for Single Family houses in the state of Massachusetts. This totaled 1,638 closed units. So while the date range is small, it wasn’t a small sample size. 

Yes, this is Massachusetts data, But there is a good chance that if you are in a different state, that your data would look very similar. 

This data represents some of the last closings as we head into 2024. This is some of our best data to help us form opinions on what the market will look like as we head into the Winter and all important Spring Market. 

The average list to sale price ratio for these 1,638 houses was 100.06%. To say it another way. For every $100 that a seller was asking, on average they received 100.06%. 

That’s not bad for a market that has taken some of the biggest punches one could throw at it. It is also important to note that this data would be catching just the beginning part of the big rate declines. In other words, the January and February closing data would encompass the market where we have seen a burst of activity due to the historic rate drops. 

But this isn’t where the data is all that interesting. Oh, it gets better. 

63.49% of the 1,638 houses sold were at the seller's asking price or more. And 52.2% of all houses sold were at above the sellers asking price. 

Did you catch that? In a market where we were just starting to get a very small amount of rate relief from over two decade high interest rates… More than half of all homes that went under agreement and then sold were over asking price.

And when you look at the 63.49% or 1,040 single family houses that sold at or over asking price, then the average list to sale price ratio was 104.27%. 

Okay. Okay. But here is what really shocked me about the data. It was in the lower pricing segment where the market kicked you know what. When you combine zip codes, Lynn, a town with an average sale price of $560k year-to-date,  had the most houses sold with 21 sales. Brockton Homes For Sale ranked number two on the list with 19 sales while their average sales price year-to-date has been $482k. Then Leominster with 15 sales, Methuen with 12 sales and rounding out the top 5 with 11 sales is Beverly, MA.

Beverly, MA would be the only town out of that top 5 list that would be considered a higher end town. 

What I gather is that this data really shows that first time home buyers are out in force and ready to buy home for sale in Quincy. They are buying now and they are going to continue to buy in 2024. 

There is a cautionary tale to be told alright… The caution is for the homebuyers who have now sat out for two or more years convinced that the market was going to tank. With rates going down, this is going to be another strong seller’s market.

The major changes in the housing market means that buyers need to be prepared for multiple offer situations where houses go way over asking price with less and less likelihood of being able to do a home inspection. It’s about to be cut throat all over again. 

Are you curious as to why home prices didn’t go down even after taking some of the hardest hits that the economy could throw at it? The answer is in this video that examines if housing prices going up are due to appreciation or inflation. 

All of my contact information is in the description below or you can reach out to me at YouTubeRealEstateAgent.com with questions. 

Until next time.

 

Post a Comment