Today's hot news - the housing market is now facing Double Trouble!

Hi everybody, Joe Hillner with Your Home Sold Guaranteed Realty, where we will sell your home for just a 1% commission, guaranteed! 

Ok, so every week, I share market data to keep you informed with the local real estate market.  
Here is this week’s Boca Market Watch.

First, Single Family Homes:

46 new listings, pretty decent, and ranging in price from $329K to $14.6M.  
4 homes back on the market, by far the lowest I've ever seen, while 9 homes listed took a price decrease, and 8 sellers raised their asking price.  And  another so so week with 41 different properties under contract, and 37 going pending.  Only 15 homes were unsuccessful in selling and were taken off the market or the listing expired outright.  And a very poor week for sales with 38 homes closed in the past week,  ranging from $320K to $9.8M

Next up, Condos and Townhomes:

49 new listings, not great, and ranging from $78 Grand to $3.8 Million.  
15 units came back on the market, 24 properties with a price decrease, and 6 sellers with an increase.  And a good week with 53 different properties under contract, and another 57 going pending,  And just 12 condos or townhomes were unsuccessful in selling and were taken off the market or the listing expired. 48 closed sales this week, not good, and ranging in price from $55 Grand to $1.7 Million!
 

Here's what's making news right now.

Home prices continue to rise to record highs, eroding affordability. That's not really unexpected news.  However, inventory of homes for sale dropped significantly in the last couple of years, reaching record lows in 2021. And as I've often reported, there was a housing shortage even before the pandemic hit in 2020.

So, "two troubles" are happening simultaneously: record high home prices and record low inventory. The NAR did an analysis of affordability at different income levels for all active inventory on the market.  Their findings were troubling, at best.

Rather than simply laying out prices and availability of homes on a broad scale, the report looked at the number of households potentially competing for active listings—that is, how many other people in an area are potentially shopping for the same home. It also uses income data, breaking down demographics into 12 categories to better understand exactly who is most limited, and most likely to have to compete with other buyers for a home.

On a national level, the analysis found that overall, it is upper-middle income households that have lost the most in the current housing market—those earning between $50,000 and $150,000.

For those making $50,000 to $75,000, affordable listings fell 6% while the number of active listings in that price range fell 63%, meaning increased competition. The number of homes available to families making $100,000 to $125,000 fell by 8% between 2019 and 2021, and those households saw competition for listings in their price range more than double, with an average of 36 other buyers per listing in that market, up from 14 pre-pandemic.

Real estate is a hyper local situation.  Get this... in our local market, those in the $50 - $75K income range were up against 96 other buyers that can afford the same home - holy guacamole!  And those in the $75 - $100K range were up against 43 other buyers. These numbers are just staggering!  Is it any wonder that prices are continuing to spike?! 

And you know what, it's getting worse, not better.  The prospect of more severe Fed tightening has spooked bond market investors, pushing rates for conforming 30-year fixed-rate mortgages above 4 percent for the first time since December 2019.  That's especially making FHA mortgages even more expensive for already cash strapped first time buyers.

And looming on the horizon, is the distinct possibility that the Fed could push the economy into a recession.  That's not their intent, but 11 of the last 12 times they've raised their main policy rate since the 1950's, it's precipitated a recession, ugh.

Nationally, new construction supplies are starting to hit the market and erase some of that inventory shortage.  But not here in Boca because there's virtually no land left to build on.  GL Homes has announced two new developments out West, with the first one breaking ground now.  They haven't finalized their pricing yet, but we expect the base homes to start at over $1MM.  That's not great news if you're in the market for something affordable.

So, double trouble for affordability, if you're looking to buy??  More like quadruple trouble - ouch.  We live in interesting times...