It’s a fact – the number of real estate sales around the country appears to be slowing, but the sale prices aren’t. There is no way to spin this. It’s a fact. The question is, what does it mean and where will it lead?
The June median national sales price was $416,000, according to the National Association of Realtors. However, sales activity continued to slow under pressure from higher mortgage costs and higher asking prices.
Locally, as we saw last week, Manatee County is also seeing a slowdown in sales, but no significant change in selling price – the median single-family home was $550,000 for the second month. June’s percentage of increase for Manatee County was 35.7% from last year, compared to the national average of 13.4%.
The demand for homes continues to exceed the unusually low levels of supply, pushing prices higher all over. High interest rates and record home prices are eliminating buyers from the market every day… not a good position for the real estate market since first-time buyers and move-up buyers are the engine of the market and the single thing that keeps it moving.
And as usual, the economists are all over the place in their opinions about the future. Some expect higher rates to slow the home price growth this year and others expect the home prices to keep rising around 5% this year per the chief economist for Fannie Mae.
I started noticing something interesting as I perused realtor.com for listing and selling prices. I took a sampling of the most recent sales as of this writing in the three cities on Anna Maria Island and Cortez. Out of the sampling of 10 closing in Anna Maria, only three properties sold at full price. Out of my sampling of 10 properties in the combined cities of Holmes Beach and Bradenton Beach, only one sold at full price. And in Cortez, I was only able to use five property sales, but even for those sales, only one sold at full price.
This analysis is, of course, totally random and not very scientific, but it does speak to me that there may be a slight shift. I was frankly surprised – what happened to all those full price and over offers that were going on for so long? Well, maybe what happened is that the market is starting to run out of steam just a little. It would appear there is still plenty of activity and the buyers are out there and being aggressive, but with a little more of a level approach. But what about the sellers? Are they starting to think that negotiating may not be a bad thing?
At the Federal Reserve’s meeting last week, the basis point was raised 0.75% as expected. Generally, every time the Feds raise the rate, it does result in mortgage interest rates increasing. That’s not written in stone, so we’ll see what happens over the next few weeks. I’ve said this many times, but mortgage rates between 5.5% and 6.5% may be a shock to the new generation of buyers, however, those of us who have bought and sold properties or have been in the real estate business for years have lived through much higher rates.
So, are we starting to see a chink in the real estate armor or is it just a little scratch? Is even the mighty Anna Maria Island showing signs of battle fatigue? Or maybe it’s just a normal readjustment of the market to where it should be – you make an offer, the seller counter offers and you meet somewhere in the middle. Those were the days.
