It’s official.  The market shifted three weeks ago.  I’ve been sharing some speculation about this, but a pattern has officially emerged.  This pattern could change with a tremendous and rapid drop in mortgage rates, but that is unlikely.

Over the last 3 weeks concessions have risen, price reductions increased, inventory jumped and the percentage of properties selling below asking has climbed.

Is this real estate armageddon?  All depends on your perspective.  Discount brokers who don’t know how to lead, articulate value or deliver excellence will be crushed in this market.  Professionals are likely frustrated with aspects of the market, but they will adapt.  And as incompetence gets out of the business and agent count decreases, professionals will have more opportunities than ever before.

But let’s be clear, the spring market has shifted to a summer market.  Prices will decline between now and year-end, inventory will continue to rise and days on market will get longer.

This will require adaptation by sellers and create opportunities for buyers.

 

Showings

Even though rates are down and buyer activity has increased, with the rapid rise of inventory, showings per listing each week remains historically, and frustratingly slow.

Year Showings Per Listing per week
2024 2.52
2023 4.00
2022 5.12
2021 12.43
2020 (Pandemic start) 3.80

Between now and the end of the year, showings per listing will slow even further if inventory continues it’s expected rise.  Anticipate approximately 1 showing per listing per week by year-end.

Inventory

Inventory is almost 75% higher than the same time as last year, ending last week at 8,400 homes on the market.  That’s a 30% increase from just 30 days ago.

We experienced something similar in May of 2019 where inventory jumped 27% and again in May 2022 where inventory jumped 45%.  In both cases, the average sales began it’s annual slide starting the next month.

Days on Market

Days on market is now 28 days, the highest we’ve seen this time of year since June of 2013.

While this can sound devastating, I cannot reinforce enough that these are the markets that drive incompetent agents out and cause PROFESSIONALS TO RISE.

Sellers will get frustrated.  Great!  Your sellers won’t because you will have done the work to:

  • Prepared the property exceptionally
  • Priced the home diligently
  • Set incredible expectations about market conditions.
  • Provide a weekly report to your seller of exactly what is happening in the market, with their home and partner with them to make adjustments.
Year Days on Market
2024 28
2023 24.59
2022 12.05
2021 7.64
2020 (Pandemic start) 25.08

Don’t be afraid of this market.  It is actually the beginning of a return to what a normal real estate market should be.  Longer market time, more buyer selection, more negotiation.

Anticipate days on market being at or over 60 by the end of the year.

Over/Under Asking Price

As of the end of May this year, 32.6% of properties were selling for over the asking price, compared to an all time high in April of 2022 at 76.9%.

Zooming in year to date 2024, we see the shift occurring with fewer properties selling for over the asking price each week over the last 3 weeks.

Unless interest rates drop markedly, with an expected continued rise of inventory, this trend is going to continue through year end.  Expect that approximately 75% of properties will be selling for under the asking price by the end of the year.

Price Reductions

Likely, agents and sellers have gotten a little better at pricing homes relative to market conditions.  This was a hard emotional and strategic adjustment after interest rates skyrocketed in 2022, with so many sellers attached to a price for their home and so many agents unprepared to guide a seller through the changing market.

Now is one of those times to have very proactive conversations with your seller.  The market is shifting, more sellers will be reducing the price for their home and if your seller wants to sell, you don’t want to get caught in a negative price curve.

Last week 29.2% of properties were reducing their price.  Expect this to be over 35% by the end of June and over 40%by the end of the summer.