Fall Sales Lowest in 25 Years

Prices went up marginally in October. It's still a surprise that prices are holding up so well given what we are seeing on the ground level...

I think it's fair to say that the average price is not necessarily indicative of today's market and prices still likely have short-term downward pressure. The key metrics all support this....sales to new listings ratio remains very low. For every sale happening, there are apx. 3 new listings coming out. Properties are sitting longer and for the first time in a while, properties are selling for under asking (on average).

Perhaps the biggest concern is just how illiquid the housing market is becoming. We had 4,631 sales in September and 4,645 in October. These 2 months typically represent a VERY busy time and combined, this was the lowest sales volume since 1998 (for those respective months).

To put that into perspective, we had more sales during the financial crisis. Don't get me wrong...buyers are out there but they're looking for tomorrow's prices and sellers are stuck on prices from 'yesterday' (spring). Until this changes, it's unlikely transactions grow especially as we head into Nov/Dec, which is seasonally a slow time for volume.

New listings did decline, however because sales volume was even lower, active inventory continues to build. We are now at almost 20K active listings, more than double what we started the year with.

This begs the question...is there any positive news? Yes, bond yields have been trending downward and fixed rates have started to come down. Nothing too significant yet but if this trend continues, it would increase purchasing power and potentially push buyers back into the market. My prediction is that new listings continue to decrease for the next 2 months, sales are lower vs. Sept/Oct which is typical from a seasonal perspective, and inventory declines slightly as some sellers pull their home with the intention to eventually relist in the spring market.