We currently have a 0.6-month supply of homes for sale. Basically, a tad over 2 weeks. It has essentially been that way since January 2021, when briefly there was a 1.6-month supply, itself historically low. There is no evidence that this is changing. Ergo: prices will continue to march higher.
The median sold price for single family homes in Sarasota County rose 3.2%, March 2022 over February 2022, to $425,000, it rose 21.8% year over year. On average, homes sold at 100% of list price and within 23 days.
This time of year, inventory typically rises, as more snowbirds make the decision to sell. That is not happening. As of March 31st, there were 18.5% less homes for sale than the same time last year.
Although I have argued on these pages that current home price appreciation is not healthy, talk of a housing bubble? The evidence does not support it. The monthly supply in 2006 was over 6 months. This is not 2006, when there was “speculative buying”, no income verification lending. Demand is higher today and inventory is lower. The bulk of homeowners are in great financial shape, credit scores are at all-time highs, lending standards remain stringent, household debt (the most significant debt in America) is at all-time lows.
If you are waiting for home prices to go down, four (4) things must occur:
- Inventory increasing on a massive level.
- Increased days on the market.
- A sudden drop in demand, with no multiple bids for homes.
- Interest rates go higher, which for 10 months I have been arguing for, and which is now occurring. Currently, the typical 30-year conventional mortgage is breeching 5%. But they need to go higher still, just enough that the economy does not go into a recession.
For housing to crash, you need all four (4) things above, plus a job loss recession. Good luck with that.