As the aphorism states, “All good things must come to an end“ and, because this is a real estate blog and not a movie review, you know that I’m not talking about the Netflix series, Ozark. Instead, it looks as though the salad days of the incendiary Spring Market of 2022 are finally coming to a close. As I’ve mentioned over the past few months, there were headwinds which were conspiring to derail home seller’s vernal saturnalia- specifically, rising mortgage rates and inflation. The stock market’s vertiginous drop over the past few weeks has simply accelerated what was already inevitable.
Since the beginning of the month, we’ve witnessed a decreased number of showings at the homes that we’ve listed for sale and fewer offers tendered. Surprisingly, we haven’t yet experienced any significant diminution in sale prices but I think that it’s just a matter of time. If I were to speculate, the helium is being released from the sales balloon at this very moment- we just haven’t yet seen the effect.
So as not to create confusion, I think that it’s important to define the difference between a reduction in sales price vs. a correction. I honestly believe that there is no imminent market correction or any dramatic pruning of property value. There are still far too many buyers looking to purchase too few homes. This inventory imbalance probably won’t be remedied for several years and, as a result, will help to support the gains that have been made over the past forty-eight months. Instead, I believe that, moving forward, negotiated contracts will discontinue their lofty ascent and, instead, will be reflective of current valuations.
Personally, I’m ready to grill a burger and catch my breath as we begin what always seems to be the shortest season of the year. I hope that you have the opportunity to enjoy a hot and celebratory Memorial Day. Enjoy!