Buyer Market Blues
What is good for the duck hunter is not good for the duck. Our housing market has been a buyer’s market for over 8 months. Buyer markets are infrequent and typically do not last – many just weeks. So far this one has proven to be slow moving but persistent.
For buyers (the duck hunters) more supply than demand has given them choices. The only sticking point has been interest rates. But those stubborn rates are causing downward pressure on pricing which is good for the duck hunters, bad for home sellers (the ducks). As the Cromford report explains:
“There are three main measures that affect housing affordability: mortgage rates, home values, and income. In the past when home values rose too fast for incomes to catch up, it was mortgage rates that adjusted and brought payments back into range, but in this cycle rates have proven to be an unreliable, volatile ally. The housing industry has been waiting three years for mortgage rates to decline and save the day, and as more time goes by without relief, the more pressure there is on home prices and incomes to adjust in order to increase demand. It is finally happening.”
But sellers are reacting to this market too.
“Meanwhile, more sellers have decided market conditions are too unfavorable for them and are taking a pause. While supply is still up 45% from last year, the last 7 weeks have seen a 3.4% decline. New listings added to the MLS every week has dropped 39% over the last 2 months, and are now at the second lowest level historically (2023 was the lowest year for new listings). Weekly listing cancellations are up 38% over last year, and expired listings in the last week of May were up 84%. In the past, cancelled and expired listings were re-listed right away and didn’t affect the total count, but this time sellers are taking a longer break and sometimes opting to rent their homes instead.”
A final note to buyers: with supply trending downwards, if rates do drop we will likely see a surge in activity. These windows of opportunity typically don’t last. Demand is elastic and can move swiftly.
A final note to sellers: Price is a trailing indicator and the market moves before pricing does. In a market that favors the duck hunters, correct pricing – with a focus on condition – and an agent who can market and negotiate are your best defense against the hunter.
Russell & Wendy Shaw
(mostly Wendy)