What I love about the real estate market is that it is always changing. Helping buyers and sellers understand the type of market we have is like giving someone a manicure on the telephone. Almost impossible because of all the nuances. Let's see if I can clear the air a little bit:
In April we had 145 properties in inventory, increasing to 156 in May, typical of spring market. In April 69 properties came on the market, and 14 went into escrow, a pending rate of only 20%. In May 51 properties came on the market, and 23, or 45%, went into escrow. So the typical trend of maximum inventory seems to be approaching. People that need to buy are buying.
The sale side is a different story. In April 16 properties closed escrow and sold, with an average market time of 38 days, to add 1/3 for re-lists, probably more like 50 days. If we divide the ending April inventory of 145 homes, by the 16 that sold, that give us an absorption rate of 9.1 months; meaning if no new homes came on the market, it would require just over nine months for buyers to purchase the homes. The rule of thumb is that 6 months of inventory is a balance market, so we are definitely in a buyer's market.
In May, we sold a total of 25 listings, so 155 divided by 25 is 6 months, so we appear to be approaching a more balanced market. The odd thing is that the Days on Market increased from 38 to 45, or an estimated actual average of 60 days.
I use a Market Index to compare markets to one another and different time frames. An index of above 1.20 is a seller's market. Between 1.20 and 0.80 is a balanced market, and below 0.80 is a buyers market. In April Crescenta Valley had an index of 0.21, in May in moved up to 0.31, confirming that we are slowly edging our way back to a balanced market. However, we are not there yet. Increasing interest rates are causing buyers to buy now, fearing that if rates go up they won't be able to afford the higher payment.
What does this mean to you? Just like April showers bring May flowers, now "I can see clearly now, the rain is gone", so if you are serious about buying, now is the time. If you are serious about selling, interest rates are still okay, so there are probably the most buyers than there have been for quite a while. Don't wait for rates to go up, locking more buyers out of the affordability room. Prepare your home, price it right, and sell it now.
For a complete copy of my report, just drop me an email keith@LaCrescentaValleyHomes.com
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