WTF is Going on With the Housing Market?

New listings are losing steam. Housing prices are still rising. What the heck? This is a headline from a recent article from Redfin talking about this housing market. And all we can say right now is WTF. What is going on? So I'm going to break down the article as usual. And you know, I'm going to give you my opinion and I'm going to share firsthand experience of what I'm dealing with right now. So brace yourselves. We're having a shift. A shift is happening. So as I just said, a shift is happening. I mean, can you feel it? Many markets in this country, they are in a buyer's market and some other markets they're starting to approach that. Now, as you know, I serve here in Northern New Jersey and I'm seeing it as well. I'm seeing the market soften. I'm seeing homes selling over ask, but not not like a hundred thousand or more over ask some rare cases there. It is happening. If homes are priced really well and there's a high demand, they are selling for that. But bidding wars are still happening, guys. As a matter of fact, just this week we helped our clients secure home. It was a bidding war. We were up against 10 offers and yep, we got them to house. So it is still happening. But what Redfin is alluding to is that now sellers are going to be holding back because they're seeing the shift happening. So what does that mean? Now there's going to be less homes on the market again, but let's not go there. Let's just dive into this article and dissect it and all the fun things that I like to do. So Redfin says here, would be sellers are pulling back as it becomes more clear. The housing market is tilting in buyer's favor in much of the country. New listings of us homes for sale are up two and a half percent from a year ago. The smallest increase in five months on a local level, new listings are falling in 20 of the 50 most populous us metro areas. The biggest declines in Tampa, San Antonio, and Orlando. There are still hundreds of thousands more home sellers than buyers nationwide, but some would be sellers are sitting on the sidelines as this market tilts more and more in buyer's favor. In much of the country, pending home sales fell 2.3% year over year during the four weeks and in June 22nd, the biggest decline in three months. There are two key reasons why home sales are slow. One housing costs are still soaring with home sale prices up 1.6% year over year to a record high and mortgage rates sitting near 7% to would be buyers are holding off due to widespread economic uncertainty and recession jitters. It's worth noting that early stage home buying demand ticked up slightly this week. Redfin's home buyer demand index, a seasonally adjusted measure of tours and other buying services from Redfin agents has increased 6% over the last two weeks and showing time data illustrates that house tours are rising faster this year than last year. So Redfin goes on with their chart. You've seen me share these before. So this is their indicators of home buying demand and activity. So the daily average 30 year fixed rate mortgage was 6.79% that's as of June 25th and that's down from 6.93% almost 7% from one week earlier. The weekly average 30 year fixed rate mortgage was 6.81% that was the weekend in June 18th and that's down from 6.89% from three weeks earlier, but still near the highest level since February. So let's talk about mortgage applications. So mortgage purchase applications as a seasonally adjusted, that was essentially flat. That was at 0.4% from a week earlier as of week ending June 20th. But the year over year change, the applications are up 12%. So buyers are coming back out. They see the change happening. They're coming out and they're getting their pre approvals. The Redfin home buyer demand index that's essentially unchanged from one month earlier and compared to last year, it's down 1%. Touring activity, it's up 33% from the start of this year. At this time last year, it was up 27% from the start of 2024. Okay. So the touring activity is increasing, right? So in a lot of these markets, you know, buyers are seeing, Hey, where's more to choose from. So now they're coming out and getting those pre approvals and they're starting to look for homes. Now let's look at Redfin's metrics regarding home prices. Now, as of June 22nd, median sale price was $400,266. The median asking price is $422,250. So that's 4.9 increase year over year. The median monthly mortgage payment is $2,820 at 6.81% mortgage rate. That's an increase of 4.5%. Pending sales is down. They only had $85,537. That's down year over year, 2.3%. Now active listings are up. So we have new listings at 102,593. That's up two and a half percent total active listings, 1,171,760. That's an increase of 14.3%. However, that's the smallest increase in 15 months. All right. So let's move on to see which markets are seeing the biggest increases and which ones are seeing the biggest decreases. So the metros with the biggest year over year increases on the median sale price, we have Newark, New Jersey, Montgomery County, Pennsylvania, Miami, New York, New Brunswick, New Jersey. Of course, of course, we see that in Jersey, the metros with the biggest year over year decreases, Oakland, California, San Diego, Atlanta, Boston, Texas, and Tampa, Florida. Now, as far as pending sales with the biggest increases, we have Dallas, Cincinnati, Montgomery County, Pennsylvania, Warren, Michigan, and Virginia beach. The biggest decrease in sales or Fort Lauderdale, San Jose, Las Vegas, Miami, and Houston new listings. Okay. The biggest increases were in Montgomery County, Warren, Michigan, Cincinnati, Baltimore, and Cleveland. The decreases in listings were in Tampa, San Antonio, Orlando, Atlanta, and San Jose, California. Now I want to point this out. The decrease in new listings in those markets that I just said, Tampa, San Antonio, Orlando, Atlanta, San Jose. I think these are the markets where it's, it's been a buyer's market. It's been shifting over to a buyer's market for the past couple of months. And what Redfin is saying that sellers are holding back. I think this is what's happening, right? So sellers are thinking, I missed a window, Mr. Mark, I'm not going to get the price that I wanted a year ago. So why bother? I don't have to sell now. Will this trend spread to other buyer markets in the country? It might, it might, but look, life happens and people need to sell. So if they have to make a move, yeah, they're going to, they're going to have to sell their home. But here's the thing. Sellers need to understand. You have to price accordingly. You have to price to what the market is today. Not what it was three months ago. Not what it was six months ago. Even in some places a month ago. And I can tell you right now in my market here, you know, I have a home. We just put on the market and guess what? Hardly any activity. Why? Because I believe it's the price. So, you know, I got to have that hard conversation. Like we have to price accordingly. People are fed up with overpaying. And I talked to my buyers. I was just on the phone with a buyer today. They don't want to overpay anymore. They don't, you know, but unfortunately it's in our market here. We're still seeing low inventory and the demand is still relatively high, but not in every town though. This is putting this out there. So you're here in New Jersey and you're looking for a home. Not every town is seeing the bidding wars like we have in the past several years. But that's not to say, you know, if somebody's thinking of selling, like don't be discouraged and say, forget it. I'm not going to put my house on the market. If you price your home well and your home shows well, these are the important things, right? The price and it shows well, you'll get multiple offers. Before we entered this pandemic market, I can tell you just about every listing that I took on prior to the pandemic, we had multiple offers and it's those homes that were priced well and showed well, we would pull in like three, four, maybe five offers, you know, but on average is about like three offers we would get. That's still good. We don't need to be pulling in 10, 15, 20 offers. We don't need to be doing that anymore. I mean, that's insanity because I will warn you of this, what I have seen in the pandemic market. And I've had, I've seen it this year to happen on one of my listings earlier this year when people are desperate and they want the house, they want any house, they will offer a ridiculous number to entice the seller to take their offer only to then turn around and either pull out because they've got their offer accepted on another house or they're going to come back and try to renegotiate if there's any issues on the inspection and bring that number down. So just putting that little caveat out there for you guys that are thinking about selling, you got to be aware of that. If you see that happen, your agent really should do their due diligence on that person, making that offer to make sure that that is legitimate and they're not going to be playing any games. But I digress. Hey, don't forget if you need to be connected to a real estate agent in your market, if you're thinking about selling or buying a home, do me a favor, you scan this QR code here. And if you're not on your TV and you can't scan it, there's a link down below. You click on that link, fill out the form and I'll get back to you with an agent in your market. Also, if you are looking to sell or buy here in Northern New Jersey and you would like to work with me and our team, fill out that same form, provide all that information. And I'll be happy to have a conversation with you to discuss your real estate needs here in Northern New Jersey. So getting back to this. Okay. So we have a whole slew of things going on in the housing market right now. Okay. We also just had Jerome Powell a couple of weeks ago say they're putting a pause on cutting the federal interest rate, you know, and, but keep in mind, the mortgage rates are not directly affected by the federal interest rate. It's they're affected by the 10 year treasury yield, but people always equate that to what's going on in the economy. If the fed doesn't cut the rate, then Oh my God, what's wrong. Okay. So now they're predicting that they're going to cut the rate two more times before the end of this year. Now, will that bring mortgage rates back down? Probably not a lot. I don't see that happening, but I think the mortgage rates are going to be hanging out around in this 6% range. I'd love to see it get into the fives, but you know, I anticipate this mortgage rate to stay where it's at. So what do I have for as far as advice for you guys? Okay. You know, I always tell you don't time the market. If you have to buy, if you have to sell because of your life situation, you're ready to make the move, go forth and do it, but make sure you are aligned with an experienced agent and a mortgage lender too. Especially if you're buying, I understand everybody's concerns with the economy and all the things, and this is what's holding people back. I get that. But remember when you're buying real estate, it does appreciate over time. So it's still a good investment. So if you're thinking of buying it, but you're apprehensive about it, you know, again, talk to an experienced agent, talk to your lender to see if it's the right decision for you. Now, as far as moving forward for the rest of this year, you know, are we going to see prices come crashing down? Look, a correction is happening in a lot of these markets, which is a good thing. So in a lot of these markets where it's becoming a buyer's market, the buyers have the upper hand right now, and they can ask for concessions. They can offer a lower price. They can get, you know, items repaired on inspections or get concessions on that. They don't have to waive any of this stuff anymore, which is a good thing, but sellers, I don't want you to feel like you're going to get beat up over this price. Your home, according to the market today, what is the market doing today? Again, I don't care what it did three months ago. What are they selling for today? And as long as you are in line with that, your house will sell and you will get your price period. End of story. That's how that goes. So just sit tight guys. I think, you know, change is coming. It's going to be in more favor of the buyers for sure, but sellers do not feel discouraged and feel like you're going to get beat up price to house accordingly and have your house show ready and make sure it looks good. You still could generate multiple offers. Again, not as crazy as what we were getting in the past, but you could potentially get some multiple offers and sell your home for top dollar. Okay. So that's what we have for the housing market this time, you guys. So hang in there. Thank you so much for watching me today to get your dose of real estate reality. My name is Jackie Baker, and I will see you next time.