Don't Be Fooled - Check the Data and Remember the Numbers Don't Lie
Note that I did not call anyone a ‘fool!’ This post is a follow-up to one that I recently wrote about Bubble vs. Supply & Demand. Speaking with agents here in Charlotte area, as well as across the nation, I am surprised that there are still agents who follow the news without doing their own research.
Many are convinced that we are in a bubble - you know, like the one that burst in a big way back in 2008. While I was looking for some supportive documentation on this topic, I found that KCM (Keeping Current Matters) had also addressed this topic (from a totally different [national] point of view). They provided the following photo.
Don’t be blinded by the headlines reporting year-over-year housing numbers these days, as well as the threat of a bubble burst. The consumer ‘take’ on these headlines should be with a grain of salt! The reports are of situational highlights with year-over-year jumps in our market sales. Essentially, the increases do reflect a combination of two things: somewhat depressed housing numbers during last year’s virus-related market AND the subsequent strong rebound. This will result in what will appear to be unbelievable growth.
The best advice that I can give you is BE SKEPTICAL when you hear news reports about the housing market. Remember, they are in the business to scare, put us on alert, etc. - they are no longer in the 'journalism' business. When has a comforting, heart-warming story EVER led the 6:00 news?! In their defense, sensationalism and horror sell - so that extra twist is always applied.
Now, here is the REAL scoop! First of all, we are NOT in a bubble. Simple economics is being demonstrated in our current market of low supply vs. high demand. For every pristine home that hits the market in our area in the $500K or below market, we are seeing a dozen +/- Offers. Why? We have 40 showings of the ONE house, a dozen or more buyers try their hat at bidding and winning. We all know, only one buyer can win. So, the 11+ buyers who lost out in the bidding war are back out, they are joined in force by 28 other buyers who were searching with them, along with even more new buyers - all searching for the same home. While that may not seem like the norm, I can tell you that IT IS - and a very conservative example too.
I recently had a home that had 40 Offers on the ONE property - that's out of 60 showings! Only one extremely lucky buyer won the honor of being the new owner of the sellers' lovely home. 59 buyers hit the road looking again... It goes on and on; the demand will continue to go on and on until we get more supply (inventory of homes on the market).
As you can see by comparing the month of March in 2020 and 2021, even with the start of the pandemic lock-down last year, our supply was higher than it was this March. Closed sales are up simply because a LOT of cash buyers feared doom & gloom last year, walking away from deals until things were more certain.
Median sales price is up 14.5% over last year this time and our inventory is down to a ½ month supply.
*Above data provided by Canopy MLS; the information is deemed reliable but, not guaranteed.
So as demonstrated by the data above, supply & demand is driving our prices up and up with each passing month. For buyers, getting into their dream homes prior to the rise in interest rates, having to avoid signing a new lease on their current rental or putting their own homes on the market, is key. Many are finding it a challenge but, we are seeing buyers with great stamina. I had an agent present an Offer on one of my listings last week. The agent shared that they had submitted well over a dozen Offers - and their Offer wasn’t that bad at all - but, it was beaten by a more attractive bidder.
So, the next time you hear someone say we are in a bubble, ask them to share data that substantiates that call! They’ll give you a definition but, no CURRENT data! The data 100% supports the supply & demand economic theory - it’s textbook!
There are certainly going to be more sensational headlines about real estate in the coming months. However, don’t be fooled. The actual story is in the real estate DATA - local and hyper-local (your own neighborhood).
Want the truth? Let’s talk! (704) 491-3310. Hiring the right Realtor® is key to a successful home sale or purchase in any market - but, it is critical in today’s highly energy market.
© Debe Maxwell | The Maxwell House Group | RE/MAX Executive | CharlotteBroker@icloud.com | Don't Be Fooled - Check the Data and Remember the Numbers Don't Lie