Mark's Market Update - Inventory Levels and Interest Rates going into Fourth Quarter 2018
Welcome to another edition of Mark’s market update. Well the weather is definitely changing, and so is the real estate market. Over the last few months we’ve been continuing to discuss interest rates, inventory levels, and sales. As an update, interests rates are over 5%, and it looks like they're here to stay. Depending on what the Federal Reserve does in December (expect another rate increase), it looks like these rates could rise to 5 1/4 to 5 1/2 over the next 3-5 months. This is something we definitely have to pay attention to, as the increase in rates will continue to impact buying power. Regarding inventory levels and sales; disappointingly, homes over $1 Million in St. Louis County and St. Charles County saw the highest Inventory levels October 2018, when reviewing October over October for the last 5 years. There is over 12 months of inventory. In addition, sales were down 15%, for homes over $1 Million in St. Louis County and St. Charles County, October 2018 vs 2017 - this is not great news for sellers. However, this is something we’ve seen a softening of the luxury market and we expect that to continue. What we’re hoping for from a seller perspective is that some of these homes go off the market (whether sold or cancelled listings), so there's just less competition. From a buying perspective, there are fantastic buying opportunities. If you’re a buyer, do not be afraid to write an offer, and see what happens. When you analyze the entire market for St. louis County and St. Charles County, all price points; the average sale price was down October 2018 vs October 2017. Sales unit volume was down 2.5% and inventory levels climbed 2.7%. So again, we saw a softening in the market for all price points, but nothing compared to the luxury homes, over $1 Million dollars. So what do we see as we go into the fourth quarter? We have to continue to pay attention to inventory levels, and see if homes are indeed coming off of the market. As an example, in Clayton we just saw three great homes go on the market that were over $1 Million dollars. It is very unusual to see 3 homes being added to the market right now. It’s going to be a really interesting fourth quarter 2018, and first quarter 2019. Also we have to watch the stock market and political uncertainty, to see the impact on the market. It's just a really difficult one to prognosticate right now. However, if you have any questions about buying, selling, investing or you want to understand a current home evaluation, don't hesitate to call, email or text. Lastly, our third Annual Client Appreciation Pie Pick Up is November 19th and 20th. Register on-line and pick up your pie, either an apple pie or pumpkin pie. You can register at www.TheGellmanTeamEvents.com We’re so excited to see you, and have a fantastic day.
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