We’ve been saying for a while now that the market has shown it’s first signs of shifting. This rang true in last month's real estate market update. June’s update further boosts this viewpoint.
So let’s start with our trend of Year-Over-Year Sale amounts. Now it’s true these numbers are not an accurate reflection of where the market is right now. However, we can look at the trend over the last few months to see a very clear decline from the madness of the market.
So although we are still up year-over-year, it’s plain to see things have been getting less and less hot over the last few months. A.K.A The trend in the market is moving downwards. Pretty much all the figures are showing this too, our most hated statistic “The 10-Year Sales Average” even shows the same trend. June 2021 was 18.4% above the 10-Year Sales average, May 2021 was over by 27.7%, and April was over by 56.2%. That number is repeatedly coming down each month as we go further into the year.
We could look at a variety of figures and find the same story. Realtors don’t make the market, the facts do. It’s by analysing these numbers and finding the trends that someone is successful in Real Estate.
This brings us on to the next point. Sellers, you are your own biggest enemy in this phase of the market. You’re still in a sellers market yes, however the trend is showing that’s not going to continue for long. You should be seeing this trend and selling ASAP if that is on your near term plans. No! Your $2.1M home cannot sell for $2.6M “in this market”. No the market is not still increasing at a rate you should expect an additional 10% in the next 6-12 months.
In fact, the blended home price index (HPI) for properties has increased 14.5% since June 2020. So on average a home has increased by 14.5% since this time last year. That is an incredible amount of appreciation in one year. Don’t shoot yourself in the foot using false information and expecting something even more inflated than that fantastic increase.
On top of this, you’re losing the fire that has been pushing the market up. So as well as conditions correcting, you’re not seeing the heated demand in the same way that inflated prices even further. What does this mean? Don’t be surprised to see a bit of a reduction in pricing before the end of the year. Without the fire of demand, buyers are aware they have time and less competition. This is only going to get more significant as the months go on.
So let’s look at prices shall we. 14.5% over the course of the year equates to an average of 1.208% price increase every month. June saw this number at 0.2%. Another one of the many figures clearly showing the direction of the market.
Buyers - If you’re not hunting for entry level homes (Up to $750,000) I wouldn’t rush your search. 0.2% a month is of course a saving you could make by buying earlier, but you have some level of safety that prices, as well as the market, is not about to go off on one again. This means you have time to find the ‘right’ property, and not be pushed into just buying one because of volatility.
So that wraps us up for this week! We could have bored you with the same repeating of the same statistics, but we try to provide perspective as always. If you have further questions on the market, feel free to reach out to Jay or I on the contact details below!
Don’t forget, you can also check out our weekly podcast version of this blog here, as well as the weekly YouTube video here.