The second quarter is typically the most active real estate market of the year, averaging 30% of all annual home sales. Sellers often start thinking about selling around the holidays and it takes a few months to make decisions and prepare their homes for sale. Spring is also a good time to list a home because gardens are in full bloom with lush greens and vivid colors before the dry heat of the summer browns everything. And finally, April/May/June are great months for sellers with young families to make their moves in conjunction with the end of the school year and be in new homes before the beginning of the next year.

But this year we have seen a deviation in this trend. 2nd quarter sales were down 25% from last year and are the lowest by number of sales since before the 2008 recession. Following the last two years, which saw double digit gains in the number of transactions, the market is recoiling from 10 year highs in interest rates. Anyone who bought or refinanced in the past 5 years is locked into an interest rate of 2 or 3 %. Unless sellers are moving out of state, it is hard for them to sell and buy, even at the same price, without their monthly payment going up significantly. 

The net result has been fewer homes for sale, which typically would drive prices up. But interest rates have limited the number of buyers and the buyers that are still looking have smaller budgets. This decline in both supply and demand has actually stabilized prices, averaging a little over 2% gain from the 2nd quarter of last year as opposed to the 8% average gain over the past 5 years. 

If you are thinking of selling and know where you are going, now can be a great time to sell. If you are thinking of buying, you will need a trusted advisor to help you navigate the current market chaos, give us a call.