The Fed's Interest Rate Cut Caused an Increase in Pending Sales; and a rather Large Increase this month in Prices Too!
For the past couple of years it has been clear that the prolonged higher level of home loan / mortgage interest rates has caused about a 1/3rd decrease in transaction activity for resale homes in Vancouver WA. With the rates coming down in response to the Fed's Rate Cut, we see, as expected, an increase in activity as measured by a much higher level of Pending Sales for this month. We also believe that more current homeowners are stepping into the market, helping to increase the number of Active Listings.
Our next graph below clearly shows the increase in Pending Sales was enough to measurably move the trend line upward quite a bit for October 2024. However, with the interest rates going back up recently, we expect this may end up looking more like a "one-off" event, rather than a trend with stamina.
Our graph below for the Short Term (3-month - Red line) and Long Term (12-month - Blue line). Clearly our past 2 year recording of sales is at a level not seen since the 2009 - 2012 time frame after the Great Market Crash. The short term line peaked slightly higher this year than last year's level; while the Long Term trend is still as flat as can be.
Next we have the Trends for Close Sales Prices. Although the prices for October 2024 are higher than the same number for 2023; the Short Term (3-month) average is still down from the recent Peak; and is also now only $3k above the 12-month/Long Term trend.
With the Inventory of available Homes for Sale still at relatively low levels, we continue to see at least Support for Price, of not upward pressure on closed sale price.
Not shown in charts above for this month include: Active Inventory is down 0.2 to 2.2 months level; a slight decrease even though Active Listings increased this month, as Pending Sales were much higher. Time on the Market as measured by Average Days is slowing and is now at 46 Days (+6); with the Median at 26 Days (+3).
In the Period after The Fed implemented a 50 basis point cut in rates, there was a temporary drop in Home Loan / Mortgage interest rates however, the sentiment of the financial markets has forced the rates back up to their previous, high level. We expect this will again strongly dampen home sales in the coming months.
We appreciate you visiting our October 2024 Home Sales and Real Estate Sales Market Report for Vancouver Washington. Please let us know if we can help you with your Real Estate needs in this market area!
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