The big question we all want to know is “What is happening in the real estate market?”
The answer is “Which ‘what’ are you referring to?”
If you live in the Pacific Northwest and during the winter you bumped into someone from Michigan or New York who said to you “It feels like snow” would you believe them? They have experienced that “feeling of snow coming” many times and have a good sense of what is happening next.
Real Estate Brokers who have been in the business for a while sense the same thing in the form of Open House attendance, showings, number of offers, days on market, and even subtle shifts in motivation or “fear of missing out”.
As you go through Open Houses you may experience a shift in the number of people looking.
What you as a consumer and I as a real estate broker have experienced is anecdotal evidence of what is happening in the market.
Lagging indicators tell us what has already occurred and may confirm our experience or anecdotal evidence.
If I take the Portland Metro area and compare April Closed Sales to the previous month in the $351,000-$400,000 range, sales dropped 27%.
Contrast that to the $1,501,000 to $2,000,000 range where closed sales increased by 67%.
Those are documented lagging indicators of what has happened.
The average home for our RMLS system in Oregon for April was $575,800.
Over an eight week period in 2022 rates rose from 3.76% to 5.11% resulting in an average monthly payment increase of $460.
Continually rising interest rates is a leading indicator of fewer buyers going to qualify, lower demand, and at least in some price ranges increasing inventory and longer times to sell.
The market we are in is a little like an earthquake where those tectonic plates well below the surface are shifting and depending where you are located, the intensity you feel may be negligible or catastrophic.
If you are noticing a subtle shift in the market, you are correct.
Questions? Glad to talk with you