Inventory is Increasing, Builders Are Adapting, What Will the 4th Quarter Bring?
Wow, is it an interesting time in real estate
I received two emails from National Builders. One has a presence in St. Louis and the other has a major presence in Florida.
What did both of those emails say that I have not seen in years
It's Mark Gellman, eXp Realty, St. Louis, Missouri.
"New Incentives Through June 30th. If using X builder home funding, the builder will contribute 3% of the purchase price, capped at $24,300, as a closing cost incentive."
"25% off unlimited options, plus cash to close when you purchase your new home from X builder."
These type of builder incentives, are something we certainly haven't seen in years.
They're both national builders, so they're seeing something in the market, probably the same thing we've been talking about, but they're seeing it on a much bigger scale
The market is changing. Builders are adapting. It's an interesting time right now in real estate.
If you are a seller the time is right now to get your home on the market, as "back to school" demand is here and has always been one of the strongest selling times.
We are hearing from a lot of buyers that are going to be waiting, waiting for what Although we are seeing changes, we are not seeing significant changes. However, the biggest changes we are seeing, is the decrease in buying power as interest rates continue to rise , even if there is not additional significant pricing appreciation.
There's optimism ❗️ There's pessimism❗️
What the heck is happening in the real estate market❓️
All you have to do is turn on the TV, read the newspaper: There's going to be a housing crash. Housing is on fire
It's Mark Gelman, EXP Realty, St. Louis, Missouri.
What is happening in the St. Louis real estate market❓️
We're seeing a really interesting dynamic
Month to Month new actives on the market - something happened this year that we hadn't seen in previous years
February 2022 to May 2022 we saw a significant bump in inventory of 28%+, when comparing to prior year February 2021 to May 2021, which was only a 6% increase.
But that doesn't tell the whole story, because what we saw was overall active inventory was down 16% first five months of 2022 vs 2021. So, although we saw the bump in May 2022, with sellers jumping on the selling bandwagon; we were coming off of 4 months with incredible weakness in inventory.
We're finally starting to see that inventory bump up, which is great news for buyers
We saw over the last month buyers getting contracts where they didn't have to pay every contract over asking, waive all contingencies, which is great news.
Another interesting dynamic when we review inventory levels - comparing January-May 2012 vs January-May 2022 there was 4x more active homes than today in 2012 it was a severe buyer's market with over 7 months of inventory vs today, where there's less than 1.3 months of inventory
We know what's happening right now, we also have seen interest rates stabilize, but what's going to happen as we move into the fourth quarter That's where my concern comes in.
The 3rd quarter, we still think there'll be a lot of stability, as people are getting settled for the new school year.
Late 3rd and into 4th quarter, it's a little concerning as the stock market continues to potentially falter, continued inflation, rising gas prices, rising interest rates
There's so many unknowns.
If you're looking to sell, we know what's going on right now, we recommend getting your home on the market.
If you're a buyer, you can't wait for the uncertainty of saying, "Well, I'm going to wait for prices to fall." We don't know that prices are going to fall. We just may not see the severe bidding wars over asking, which we've already seen slow down, and we're seeing slowing down nationally.
We'll continue to update you. But as of right now, more inventory, but still significantly less than prior years.
If you have any questions about buying, selling, investing, don't hesitate to reach out.