Market Update
This past May, Corey Moran and I were recording our weekly podcast and I made the following statement, “I’ve got to be careful because it’s just a few days worth of data, however, I’m wondering if the market is starting to change.” Well, three months later, I have a definitive answer.
Indeed, the market has changed.
Properties are sitting on the market longer, they’re surviving delayed negotiations, they’re selling with fewer offers, and they’re actually selling below list price. Additionally, buyers are now asking for inspections, and we’re now seeing an increase in the number of mortgage contingencies. How the world has changed!
Despite justifiable concerns, there is still a lot of good news. First, and most importantly, the gains that homeowners have enjoyed over the past three and a half years seem to be locked in. Your house is probably worth fifty percent more than it was at the beginning of 2020! 
Congratulations! Additionally, if a home is in mint condition, in a great school district, and appropriately priced, it will still enjoy some of the same irrational exuberance that had come to define the post-COVID real estate market. The problem is that, unfortunately, there just aren’t enough of those opportunities. As a result of “rate lock”, most homeowners remain unwilling to list their existing residence for sale. Those that are entering the market on the listing side are mostly those that need to sell as a result of death, divorce, illness, or bankruptcy. Sadly, these homes are not traditionally in near-perfect condition.
Looking Ahead
I’m fascinated by the next few paragraphs which I began writing this past weekend….
After the Federal Open Market Committee met at the end of July, Chairman Powell stated, “Looking ahead, we will continue to take a data-dependent approach” to future interest rate hikes. Well, in light of CPI and employment figures, the markets believe that the Fed will refrain from raising interest rates when they meet again on September 16th. Of course, the intent and direction of the Fed becomes a bit murkier the farther out that we go. Some pundits believe that one more interest rate hike is necessary before the year’s end to put the final nail in inflation’s coffin. Others believe that an array of forces will coalesce to lower the CPI closer to the Fed’s desired goal of 2% inflation without further rate hikes. Regardless of one’s opinion, chattering academics increasingly believe that we are currently experiencing the elusive soft landing that everyone has hoped for.
So, why am I fascinated??
Well, given the mercurial nature of the US economy and the interconnectedness of the nations of the world, that which seemed so apparent last week may suddenly be changing. The speed and enormity of the change is startling. Both Russia and Saudi Arabia have abruptly curtailed oil exports and, as a result, oil futures are surging. There’s a lot of speculation that they’re doing so in order to impact next year’s presidential elections. If political talking heads and other pundits are correct, we could see higher gas prices throughout most of next year. If this holds true, inflation will, once again, begin to surge and the Fed will need to continue to raise interest rates as a countermeasure. When that happens, mortgage rates will climb and an already beleaguered real estate industry will suffer further strain.
Once again, the economy has demonstrated that nothing- not advanced academic degrees, computer modeling, nor historic precedent- is capable of adequately forecasting the direction of inflation, interest rates, or anything else having to do with our personal finances.
A Milestone
Despite the difficulties of the year-long real estate recession and an uncertain future, I’ve been celebrating. My apologies, in advance. I know that this is remarkably self-ingratiating, but here it goes…
As a result of the kindness and confidence of our friends and clients, my team and I are proud to report that we are the number-one agents in Buffalo, Rochester, and Syracuse. No, we don’t sell in Buffalo or Syracuse. We simply happen to sell more real estate, based on dollar volume, than anybody else in Western New York. It’s a long-held goal and, after many years of hard work, we’ve finally achieved this exciting accomplishment. Thank you. We wouldn’t be doing this without you!
If you’d like to talk about how it is that we can help you buy or sell real estate, feel free to give me a call. I’d love to talk! 330-8750