Today's hot news: The month of May manifested the least affordable housing market in 16 years, oh boy! 

Hi everybody, Joe Hillner with Your Home Sold Guaranteed Realty, where we guarantee your home will sell for 101% of asking price or we'll pay you the difference! 

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:

81 new listings, very nice, and ranging in price from $385K to $19.5M!  28 homes back on the market, while 68 homes listed took a price decrease, a huge jump, and 4 brave sellers raised their asking price.  And  a very light week with 28 different properties under contract, and another 28 going pending.  19 homes were unsuccessful in selling and were taken off the market or the listing expired outright.  And a poor week for sales with 48 homes closed in the past week, ranging from $315K to $11.6M!

Next up, Condos and Townhomes:

85 new listings, pretty good, and ranging from $115 Grand to $2.5 Million.  23 units came back on the market, 33 properties with a price decrease, and 12 sellers with an increase.  And a middling week with 42 different properties under contract, and 34 going pending,  And just 10 condos or townhomes were unsuccessful in selling and were taken off the market or the listing expired. 58 closed sales this week, not good, and ranging in price from $85K to $5.3M.

Here's what's making news right now.

According to the latest Mortgage Monitor Report, released by Black Knight, Inc., rising home prices and volatile interest rates continue to compound the affordability pressures in the housing market.  The same dynamics have also served to increase the housing wealth of American mortgage holders by a significant margin. Here are some of the key findings:

Active listings remain 67% below pre-pandemic levels, with 820,000 fewer listings than would be typical at this point in most homebuying seasons; that's on a national level.  In our area, we are down 60% from pre-pandemic inventory levels.  We are now at about an 8 week supply, which is up significantly from where we bottomed out - at 3 weeks of inventory.

The continued lack of supply continues to weigh on home sales and keep prices higher than they might otherwise be, given current affordability metrics.

A critical mortgage qualification metric is the payment-to-income ratio.  In recent years, a 20.5% ratio has been a rough tipping point at which price appreciation begins to soften, but given the severity of inventory shortages, home prices still continue to rise—even as that ratio has climbed to 33.7%, which is just shy of the 34.1% high reached in July 2006.

Home price growth thus far has created a very difficult environment for prospective homebuyers to navigate. The monthly P&I payment required for the average home purchase is up nearly $600 since the start of the year, and factoring in current income levels, housing is now within a whisper of the record low affordability seen at the peak of the market in 2006. Even modest increases in either rates or home prices at this point would push us over that line.

But it's not all bad news.  It depends on one's perspective.  With the average-priced home up 42% in value since the start of the pandemic, current homeowners with mortgages are sitting on an average $207,000 in equity that they could choose to tap and still keep a 20% equity buffer in place. That’s a result of an astonishing $1.2 trillion gain in accessible equity in the first quarter of 2022 alone—the largest such quarterly growth ever recorded. In total, American mortgage holders have more than $11 trillion in tappable equity, the largest total in history! 

It really is a dual landscape—one that grows ever more challenging for those looking to purchase a home but is simultaneously a windfall for those who already own and have seen their housing wealth rise substantially over the last couple of years. Depending upon where you stand, this could be the best of all possible markets, or the worst!