It’s true – there is some evidence that the market may shifting. It’s also true that last month was one of the busiest months for both the Chris & Caleb team and the Keller Williams Exton office. Shifts tend to happen when everyone is celebrating the high points in a market, and take people by surprise, so let’s look at the data and see what it tells us….

DEMAND:  The numbers for the last few months were revised this month for the number of homes sold over the last 3-4 months.  Demand (number of homes sold) was up 19% in June and 18% in July over the year before. At the moment, the numbers for August are not as drastic, however, I expect those to be revised, as our team and our office had one of the best months ever. To be honest, this feels sort of like a “peak” and that is based on rumors from “experts” that a shift is coming.  The question becomes – if a shift happens, what does that mean for everyone. I’ll address that in the conclusion

SUPPLY AND INVENTORY ACCUMULATION: Supply is still mirroring last year, however, due to increased demand, the inventory accumulation is still below last year. All that means is that homes are selling faster than last year. For sellers, it’s good news – your home will sell faster and for more money.  It’s not as good news for buyers as they have to move quickly and pay more for a home than they would have last year.

SOLD TO LIST RATIO:  This number is also mirroring last year. This is one of the numbers that is leading us to think we might be hitting a peak. Folks are getting, on average across the county, about 96% of asking price. In many pockets, that is actually 99% or more, of asking price. Again, great news for sellers, not so great for buyers.

RATES: Rates continue to hold at around 4%.  There have been many rumors of the rates going up, however, if the market softens, I don’t know that the fed can follow through with that.

CONCLUSION: August was a C-R-A-Z-Y month for the Chris & Caleb Team. We sold more homes last month than ever, and our office seemed to have every corner booked with settlements. Typically August is more restful, but this August was extremely active.

I mentioned above that this past month has felt like a “Peak”. That is based on several things. First, we are 10 years into a “7 year cycle”. In other words, it usually is about 7 years in between one real estate market peak to another.  However, it’s been 10 years since the last peak, which means we are 3 years overdue for a shift.

As I’ve watched the national and international markets, it makes me wonder if we are headed into the shift that is expected.  One indicator to watch is the list to sale price ratio. If sellers begin to get less, on average, for their homes, that is a great indicator that the market has shifted. For 6 out of the last 8 months, the average list to sale price ratio was below what it was at the same time the year before.  That’s not a great sign. This is a number to watch and see what happens.

If the market is shifting, it’s not expected to be a drastic shift like we saw in 2008, but more of a softer shift, but only time will tell. What this could mean for seller’s is that it will take longer to sell a home and they will not get as much, however location will dictate that greatly. For Buyers, it means that they will get more negotiating power and can breath just a little bit compared to the last few years.

Of course, this is all IF the market shifts.  Only time will tell. Either way, we recommend that you always have the very best real estate professional on your side when you go to buy or sell a home. Call us to see how we take the stress out of the process.