Sales Prices halt their rise; while the Number of Sales Closed remains Incredibly Low.
The Federal Reserve and Wall Street have continued to keep financing rates very high for home sales; which is the largest driver we know of that is keeping the number of homes sold at about 30%+ lower than we've seen in the past 5 years. The relatively high rates are putting a huge pinch on the buyers wanting to enter the market; and putting the pinch on owners that would like to sell their current home and need a new loan to buy their next home. The combined result has been an imbalanced environment with slightly more buyers than homes to buy; keeping prices up.
The first chart we have shows the August-only changes, 2023 vs. 2022:
In 2022 at this time the "Great Slowdown" was about 4 months old thus, the differences shown here aren't as great as what was seen in the first quarter of the year.
With mid-summer typically being the Peak of the real estate / home buying season in Vancouver WA, the chart below of Average Home Sales (3 month rolling average) hit its high in July, and tallied a slightly lower result for August:
As we move forward through the rest of the year, we expect the difference between 2022 and 2023 to diminish greatly; and the two may in-fact come into close alignment.
Looking next at the 3-month and 12-month rolling averages for the Closed Sales, we can also see the seasonal topping-out taking place; and at a much, much lower level than what we've seen in the last 10 or so years!!!
This year the 3-month line has barely exceeded the 12-month line; and now appears to have peaked. At this point we can only hope that the trend(s) here will firm-up and someday start to resume a more expected higher and healthier level.
With greatly reduced sales, ore would expect that Prices would have downward pressure; and indeed, at the beginning if the rising-rate environment prices did take a strong downward hit. However, less than a year into this new environment prices shot back up to briefly hit a new High (see below):
After a 5 to 6 month strong run-up in prices, we are seeing a strong slowing this month in the rate of change to closed home sales prices.
For other data items of interest; New Listings dropped again, while Pending Sales dropped a bit more; the result being a move up in Active Inventory from 1.3 months level in July, to 1.6 months in August. Cumulative Days on Market (CDOM) came in at 22 which is a much brisker pace than last month; while Closed sales were at 312 which is modestly more than last month.
Without a doubt Vancouver Washington housing market is short of Available Listings; and we need more Sellers willing to step out and be in this market. In fact, if prices do start falling in the near future, time may be short to take advantage of these high prices. Please contact us if you'd like to discuss this in more detail.