The Fed has signaled that interest rates aren’t going down any time soon, so with rates predicted to remain at their current levels for the foreseeable future, a lot of people are deciding to finally put their property on the market and move forward with plans to make a change.
This was reflected with the addition of 216 new listings locally in May, which increased the number of homes for sale by 24.4% and created a 36.8% jump in our supply relative to the rate at which things are selling. Correspondingly, we had a 5.6% drop in the Median, at a time of the year when home prices are usually on the rise. And the trend appears to be continuing, with 23 new residential listings popping up in a single day earlier this week.
On the other hand, this has been happening in the midst of graduation and the other “Maycember” activities that dominate family schedules towards the end of the school year, so we may just be experiencing the usual dip between Memorial Day and Father’s Day. In any event it will be interesting to see what happens this time around moving into Summer.
As people come to terms with making change, the ideal outcome is to help make sure their change will be for the better. For some, this means choosing to move out of the area where their sale proceeds will go considerably further, while others have taken a more creative route.
During the past year, our multifamily market has also seen a rise in inventory, with the number of available apartment complexes growing to a 1-year supply, with listings sitting for an average of 113 days. As with homes, this has been driven largely by the high interest rates, but further exacerbated by increasing regulations on rents and occupancy under recent laws like the Tenant Protection Act which have soured the appeal of owning income property.
Over this same period however, there has been an increase in demand and activity for small multifamily properties and duplex listings in particular, which have been selling on an average in just 17 days on market countywide over the past year—with all but one going for their full List Price or higher. And based on the several I have been first-hand familiar with, many of them are being bought not as investments but rather as a place to live.
Some of these purchases are being made by two sets of households going in together to buy a duplex for less than a pair of equivalent condos would cost, while others are by buyers who figured out that having an extra unit helps offset the higher mortgage payments and property taxes that have made buying a home otherwise unaffordable in one of the most expensive markets in the country.
Both of these lines of logic make sense, and for buyers willing to explore such possibilities, sometimes it just takes a different approach to find the right solution.
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