It's that time of the month again!
A time when summer is in full swing in Indianapolis, when people enjoy warm summer days, a cold refreshing drink and fun filled times in their own backyards.
I mean, who doesn't enjoy a BBQ on a balmy Indiana afternoon?
Grab a big ol' bag of charcoal briquettes, get the lighter fluid, a box of matches and...
This scenario reminds me of something.
Oh, you know...
The latest housing market statistics are out and well...
...like a summertime BBQ, the embers of our housing market are starting to cool, but they're still hot.
It's going from this...
Keep in mind every fire simmers down at some point.
You may not be able to see the flames, but doesn't mean it ain't still smoldering.
I mean, check the stats:
Percentage of ask received by the sellers is STILL over 100%. While days on market (DOM) have risen, they're still only 8%.
Compare that to July 2019, where average DOM was 11 days (well before the 'rona) and percentage of list received was 98.1%.
Does that say cooling market to you?
It doesn't to me, and I'll tell you why: our market is driven by scarcity. There are not enough houses to go around and we first started seeing this on the coasts in 2017. It's finally reached the Indianapolis Metro Area--it always take a minute for what's happening on the coasts to reach the Midwest--and here we are.
Certainly supply chain and labor issues have an affect on the housing market, but the bigger problem is the price of gas. When the price of gas goes up, consumers become skittish, affecting them directly and causing them to think twice about making a move. This, coupled with an increasingly low inventory/high frustration market, is causing many buyers to put their homebuying goals on pause.
One more thing: there's been a lot of talk about pricing reductions on homes in the Indy Metro happing lately. Here's the bottom line: in a strong seller's market, it makes ALL the sense to see how much money they can get for their home. With interest rates rising, 10 to 15% of the buying pool is effectively eliminated--leaving 85 to 90% of buyers still able to buy. So, if one's buying pool has shrunk slightly, then smart sellers adjust accordingly to meet market conditions.
In this case, prices "dropped" a scant 1.8% from last month.
Pricing adjustments do not a housing crash make.
Also, don't let this hysterical diminuitive fowl tell you anything about the housing market.
*See what I did there?
With correlation is not causation gratitude,
p.s. First person who knows what fable I'm referring to gets a gift card. Email me here!