Hi, I’m Drayton Saunders, president of Michael Saunders and Company, and welcome to our second quarter market update.
Did our end-of-season perform as expected?
So what about second quarter? We look now at the numbers, you will see a very consistent pattern. You saw the beginning of the year, inventory spike and then you saw through spendings and ultimately closed sales and inventory being eaten away through very consistent buyer activity. Now, any second quarter and we look at those same inventory trends, we’ve seen that buyer’s market start to create in a little bit of summer lull, a seller being a bit more control depending on their competitive set. But again, I will remind you that this market is one because of the slowing pace of appreciation, the fact that new is here to stay and that you’re always comparing against what really is that choice of buyer is looking at, that you cannot out price the market. And we do see that trend again continuing in the third quarter where if it is not priced to sell, the buyer is moving on or they’re waiting for that. Next, better property. Come on the market.
Did the stable increase in median home values continue into Q2?
So let’s talk about price and let’s talk about price appreciation. When we look at the statistics for median price, you will see an overall narrative strength that this second quarter saw, again, an increase in the overall median price. Now, that again goes back to that concept of two competing trends for sellers competing with new construction. They may not have seen that strength in their market value. They may have seen really that the sale of new construction be the component of the market adding to that overall narrative. So, again, you really have to break down the general into the specific to know what you’re competing with. But from a overall health, the general number is very strong and bodes well for this region.
Should I list my home before peak season?
So what we’re seeing as we head into August and if we look at those inventory numbers, again, the market today, the most important trend is that need for inventory. This is a time of year where you should be reassessing if you’re a seller. Should I come to market now? But if you go back to the data and you really look at sales that happened in third quarter, what you’ll see is there is strong activity throughout the year. And so really what we’re doing now is counseling somebody about what they want to do is their next step.
So if you’re thinking of selling. Let’s talk about that destination. And there is no bad time to list. And those are some of the best conversations to have right now as we move into the low point of inventory in the market.
What kind of activity did we see in the luxury real estate market?
So what about the luxury market? Again, hearing you might be reading contradictory headlines, on one hand, you might be seeing something that says overall slowing of the pace of luxury sales, but foot the page and you might be seeing a headline about our next benchmark sale in this market. So how do you make sense of that? Really, when you have to go back and say, what are you comparing it to? And last year was a very strong year for luxury. So not too unexpected that the pace of sales was going to slow somewhat and normalize. And so I look at the change really being about more of a normalization of that pattern of luxury by.
What is currently motivating the luxury buyer?
The other really interesting thing to point out in the library space is really what kind of competitive set you are shopping for that luxury buyer. Like every buyer has to feel excited about that home. And again, a lot of that desire ability is about what’s on the market and available. And so if they can’t find out what they’re looking for, they’re just not going to buy. And I would say in this market, particularly in the resale luxury space, it is hard to find that perfect property. Again, a good signal for this is a strong time even in the luxury segment, even with growing inventory for a well-positioned home to come to market.
What can we say about the first part of Q3?
So what about expectations for the remainder of the year? Are certainly as we move into third quarter? Well, again, I look at third quarter as the quarter of being ready, ready for that opportunity for sellers. It’s going to be looking at why this is a strong time to come to market. And for buyers, it’s about getting ahead of the curve, about being in the market when you’re seeing those choices that you’re looking for and in an increasing mode and really peak at the beginning of the year. So I think buyers, this is not a time to wait to shop. This is about being active in the market and it’s proven year over year that those are in and ready to act and get the best choice. So I think third quarter is all about being prepared.
Some Frequently Asked Questions
The most common category is single-family homes. There are also condominiums, co-ops, townhouses, duplexes, triple-deckers, quadplexes, high-value homes, multi-generational and vacation homes.
The price of housing, like the price of any good or service in a free market, is driven by supply and demand. When demand increases and/or supply decreases, prices go up. … So, if there is a sudden or prolonged increase in demand, prices are sure to rise.
- Supply and demand. Put simply if demand for houses increases faster than supply, then house prices go up.
- Interest rates.
- Economic growth.
- Location, location, location.
- Room to move.
- A second bathroom.
*The information above does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of a qualified attorney.