The market is shifting. Or tilting. Or adjusting. Whatever word you want to use, the real estate market has changed.
Since the beginning of July, when interest rates started to creep up, we saw a decline in home sales. In June of this year, 231 homes sold on the west side on Madison. In July, the number of home sales dropped to 198.
The sale prices have also come down. Nationally, sale prices of existing homes fell by $10,000, to a median of $413,800 in July, compared with a month earlier, according to the National Association of Realtors®. Closer to home, we have seen similar numbers.
The average sale price of a single family home on the west side of Madison was $551,303 in June 2022. By July, the average sale price had dropped to $504,455. The August numbers are not in yet, but I expect to see the price of homes drop a bit further.
So what does all of this mean? First, it’s a normal adjustment. The market of the last two years was not sustainable and I’m not sure anyone thought it was.
Secondly, there are more people in need of homes than there are homes available, and the mortgage issues that occurred during the recession are not a concern today.
And finally, as home prices correct, most homeowners who have owned their homes for a while have gained great equity during the previous two years. Even buyers who bought at the height of the market shouldn’t worry if they plan to stay in their homes for a while.
So, even in this tilting, shifting and adjusting market, there isn’t cause for alarm. Sellers are still selling and buyers are still buying. Now is when a trust Realtor can help navigate the changes.