The lazy days of summer have been upon us. Roads and restaurants are less crowded and the real estate market feels just as sleepy. CoreLogic economist Selma Hepp said home prices may have peaked before the typical summer lull, when families were likely to have headed out on vacation now that they can travel rather than spend their time house hunting. High prices and buyer fatigue may also be pushing more buyers out of the market. “There are fewer people who can compete at that level,” Hepp said.
Prior to mid June, the gains were even more dramatic compared to a year ago, when COVID-19 restrictions limited home tours, slowed sales and distorted the market. The median sale price for an existing Marin County home was $1,750,000 in June and had risen 29% in the year and a half from the beginning of 2019 to June 2021 according to CoreLogic data. Keep in mind this is trailing data from the overheated Spring season.
But how long can this continue? There are subtle signs that the market may be shifting. What are the signs. They include:
How many multiple offers did a home receive. Up until June, it was common to see 3-5 or even more offers on a home. After school was out in mid June, a home might receive only two offers or one offer or none at all.
Days on market have been creeping up. In the Spring, a home would allow a week of viewings and take offers after the week. Now, many homes are taking longer to go into contract.
Sale to List Price ratio have not been as dramatic. Double digit gains have been fewer and far between for most sold homes.
Active listings edging up. Even in the middle of summer, the percentage of homes for sale has increased adding inventory.
What does this mean? It’s hard to say. School resumes in most areas of Marin in a week and home sales typically pick up after Labor Day. The buying audience may be back for round two, refreshed and ready to buy. Interest rates still remain historically low at under 3% for a 30 year fixed rate mortgage per Freddie Mac and inventory, though higher, is still relatively restricted in most markets. Time will tell where this market is headed. Stay tuned!