Real Estate Market Update | October 2018

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    Market Highlights

    The Number Of Homes Sold in September  is  390.

    The Average Sales Price Of The Homes Sold in  September is $319,583.51.

    Year to Date Sold Homes are  DOWN -5.50% over 2017.

    Year to Date Sold Avg Days on Market are DOWN -12.17%  over 2017.

    The Number Of New Homes For Sale is DOWN -14.75% from last month.

    The Number of New Homes in Escrow is DOWN -5.53% from last month.

    The Number of Homes Sold is  DOWN -24.12% from last month.

    The Average Sales Price is UP 3.57%  from last month.

     

    Inventory Statistics

    Over the last 12 months the average number of homes to be on the market for the month (in this case, September of 2018) has increased by 31%, with the average number of homes on the market creeping up to 1,650.  That is the most homes that we have had on the market in the last 3.5 years.  Another interesting fact is that the inventory level has increased for 6 consecutive months, which hasn’t happened since the end of 2013.

     

    Another way that we look at the housing economy is the absorption rate (average number of homes for sale / average number of homes that sell each month).   Our current absorption rate is 3.5 months, meaning if we continue to sell homes at our average rate (just under 470 homes per month) and we didn’t have any more homes come on the market, at the end of 3.5 months we wouldn’t have any more homes left to sell. At 3.5 months, we have the highest supply level in just over 3 years.

    I’ve discussed this before, but a 6 month supply of homes is a balanced market – the market doesn’t favor buyers or sellers.   So while we are well below the balanced market inventory, it would not take long for us to hit a balanced market and the shift into a buyers market.

    Using a pendulum as an analogy, the momentum of the pendulum is such that it falls (or declines) very quickly after it has reached it’s maximum height on either side of its swing. While it is falling is spends the least amount of time at the bottom of its swing, because it has so much momentum that it blows right past the center point (balanced market) and doesn’t really begin to noticeably slow down until it is about half way through its swing (or cycle).

    The absorption rate is up 33% from last September, while that is a big number, more surprising is that at the beginning of 2018 we had a 2.08 month supply (the lowest we have seen in almost 13.5 years) and we have gained almost 1.5 months so far this year. And, we are just now going into the slow time of year.

    Besides having only sold 390 homes in September (27% less than last September), so far we have averaged an increase of 150 more homes coming on the market each month than we did last year.

    In September we had the highest average sale price since July of 2007 at just under $319,600.00.  That is 10% higher than last September, which is an amazing appreciation rate, and we are still 10.5% lower than the peak of the last market.  I am honestly surprised that we have come this close to the peak pricing of the last market, since we don’t have any really sketchy financing in place – like what allowed us to climb so high last time.  However what we have had was insanely low interest rates.

    Rates have been hovering around 4.5% since April, but in the last couple days they have started to climb because of fed rate hike announcement last week regarding a 0.25% increase.  The financial market is the most volatile now that it has been in the last two years.   This should make for an interesting 4th  quarter!

    The Two Inevitable Burning Questions:

    So Is Now Still A Good Time To Buy?  Is Now A Good Time To Sell?

    I am going to tackle both of these with the same answer:  It depends.  The largest factor in how I answer the question on a case by case scenario is: What is the goal you ultimately want to achieve, and are you operating on a long term plan, or a short term plan.  Then we can dive into the more detailed approach on what makes the most sense for you, and as always what I would do if I were in your shoes.

    You can take a look at all of the homes for sale in the Antelope Valley (and pretty much all of Southern California) by Clicking Here.

    To find out what your home is worth, you can get a quick evaluation here: https://www.talbotandwatson.com/home-valuation/

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