𝗜𝘀 𝗢𝘂𝗿 𝗥𝗲𝗮𝗹 𝗘𝘀𝘁𝗮𝘁𝗲 𝗠𝗮𝗿𝗸𝗲𝘁 𝗕𝗲𝗰𝗼𝗺𝗶𝗻𝗴 “𝗢𝗹𝗱 𝗠𝗼𝘁𝗵𝗲𝗿 𝗛𝘂𝗯𝗯𝗮𝗿𝗱”?
The cupboard full of active listings for sale is starting to dwindle and trending towards bare. According to the Cromford Index, supply is down a whopping 42% from the peak of October 2022. Where have all the sellers gone? Answer: they are staying home and hanging on to their low interest rates. When will that all change? Either when market conditions (interest rates, economy, shifts in pricing) prompt change or with time. Moves can only be put off for so long – whether buyer or seller.
To that point, we saw a drop in demand as interest rates spiked in 2022. Yet even with rates currently only moderately lower than their peak – demand has picked up. Buyers needed time to adapt to the change in rates. Eventually, time wins over inertia and the need to move forces action. This rise in demand is continuing to put pressure on prices to rise, albeit more gently than in years past.
While demand tends to be volatile – supply is generally not. Large jumps in supply typically only come from market manipulation or catastrophe. Nearly everyone shivers at the mention of the 2008 market – a shining example of catastrophe if ever there was one. The valley currently has the lowest number of delinquency rates and foreclosures in history. No catastrophe lurking around the corner for now.
The point is this – supply is scarce at the moment and getting scarcer. The supply needed is not on the immediate horizon. That means prices are rising. If you are a buyer – it is time to buy. Ignore the doom and gloom of the media and pundits – we have a supply problem that cannot be solved this year. If you are a seller, remember that eventually supply will show up. Take advantage of an empty cupboard.
Russell & Wendy Shaw