Today's hot news:   Home sales fall for the 5th month in a row as median prices hit a record high!

Hi everybody, Joe Hillner with Your Home Sold Guaranteed Realty, where we guarantee the sale of your home or I'll buy it! 

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:

This past week, 70 new listings, not bad, and ranging in price from $250K to $7.9M!  23 homes back on the market, while 85 homes listed took a price decrease, that number has been going up every week for two months now, and 7 sellers raised their asking price.  And  like last  week, only 34 different properties under contract, and 24 going pending, not good at all. 20 homes were unsuccessful in selling and were taken off the market or the listing expired outright.  And poor week for sales with 48 homes sold, ranging from $325K to $10.5M!

Next up, Condos and Townhomes:

80 new listings, thats decent,  and ranging from $120 Grand to $6.5 Million.  15 units came back on the market, 52 properties with a price decrease, and 11 sellers with an increase.  And light week with 46 different properties under contract, and 27 going pending,  And just 14 condos or townhomes were unsuccessful in selling and were taken off the market or the listing expired. 48 closed sales this week, a bad week, and ranging in price from $89K to $1.5M.

Here's what's making news right now.

Sales of existing homes ticked down 5.4 percent between May and June, and were down 14.2 percent from a year ago, according to data released Wednesday by the National Association of Realtors.

Meanwhile, the median price of an existing home climbed 13.4 percent from June 2021, hitting a new high of $416,000, and the inventory of unsold existing homes climbed to 1.26 million by the end of June, the equivalent of a 3 month supply at the current sales pace, which is an increase from the 2.6 month supply we saw in May.  This is a clear sign more buyers are pulling back from the market.

And why is that? Higher interest rates?  That is certainly a factor in the lower price ranges, as many first time buyers have been priced out of the market.  But in the luxury price range, it is the dips in the stock market that have really hurt.  Buyers that were previously feeling very wealthy are now pulling in their horns and delaying or even curtailing a purchase.

In our area, the median list price for single family homes peaked at $1.6M the beginning of May.  Get this, last week, it fell to $1.1M, holy crap!  And days on market are going up - 59 days on average last week.  Two months ago, it was more like 59 hours, lol.  

Inventory is the real bellweather.  We now have 66% more homes on the market than we did at the beginning of May, and we are up 166% since early February, wow!  Homes are sitting on the market longer and more are coming to the market in the interim.  Buyers now have choices, and the number of multiple offer situations has dropped significantly.

The last stat I'll throw at you is price per square foot.  This one is a lagging indicator, so we're kind of looking backwards.  In May, we were selling single family homes at the peak of $508 PSF.  It's now down to $444 PSF, a drop of 13% in just two months.  That's pretty dramatic folks.

It has become quite obvious that the market shifted significantly in early April.  And with higher interest rates on the horizon and a looming recession, it would appear that we're in for what could be a rough economic ride.

I was showing $3M homes yesterday.  One owner agent, whose home has been on the market pushing 60 days now, told me that she had received 5 offers, all around asking price.  Despite that, she turned them all down and raised the price $150K!  Clueless!  Now there is someone who is obviously not watching the market very closely and is destined to get slapped around.

What this all means is, if you're a buyer, there will be some great opportunities in the near future.  The big institutional investors are done buying. They're now landlords or sellers.  So you won't have them as competition.  It's the smaller investors that are gathering cash and filling their war chests.  Their philosophy is to make offers, in cash, well below asking price, building in a hedge in case there's a market correction.   We define a market correction as a 10% drop in prices.  Historically speaking, we are way overdue for a correction, but with the huge imbalance in supply vs demand, that still seems somewhat unlikely.

But, you never know...  And if you're thinking about selling, you need to look at the neighborhood comps AND the market stats and plan your sale strategically.  Don't let greed trap you into a short sided decision and let you get caught in a death spiral of chasing the market.  Don't be like that knucklehead owner agent who was trying to convince us that her home is still appreciating at a 16% rate.  You can't argue with stupid...