There’s an immense amount of real estate news and data to sift through every week—not to mention the trends that are happening in your local market.
That’s why BAM started the Hot Sheet—to break down the last 24 hours’ worth of news in the industry every morning the markets are open.
But, let’s face it, with your busy schedule, it’s not always feasible to tune in at 9:30 am EST.
So here’s a quick recap of what you may have missed this week.
Divided Housing Market
To start off the week, host Byron Lazine shared a Lance Lambert article that talks about a bifurcated housing market.
Looking at data nationwide, there are pockets of markets where inventory has increased over the past six months. In addition to increased inventory, there are areas where home prices have declined—as much as 10% in some markets. The average homeowner in Idaho, for example, has seen home equity decline by $21,000.
However, other markets are seeing the opposite, with inventory lower than it was last year, and sellers seeing multiple over-ask offers. Rather than a decline in inventory like in Idaho, the typical homeowner in Florida gained $49,000 in equity last year.
All of this shows how important it is to stay on top of the local trends in your market by studying your MLS hot sheet daily.
Watch the full breakdown of a bifurcated housing market here.
Don’t Confuse Today’s Market with 2021
NAR reported a spike in existing home sales for February 2022, with a seasonally adjusted rate of 4.58 million units sold. The median price came in at $363,000 for February, a 0.2% decrease year-over-year.
Why are 4.58 million units such a big deal? Because in January, that number dropped to 4 million, which means there was a 14.5% increase in existing sales month-over-month.. But it’s important to keep things in context with data—especially as we start hearing things like “this is 2021 all over again.”
By returning to the data, we see that back in the spring of 2021, existing home sales were near 6.3 million. So while February’s month-over-month increase is great news, it’s still almost 2 million fewer sales than in the spring of 2021.
Watch the full breakdown of existing home sales here.
The Fed’s Decision—and What it Means for the Housing Market
Byron shared his notes from Jerome Powell’s speech on Wednesday, breaking it down into three categories: banks, housing, and recession.
Throughout his speech, Powell worked to instill confidence in the U.S. banking system, saying deposits are safe. Since SVB experienced the fastest bank run in history, there will be investigations taking place to learn what went wrong and to make changes accordingly.
When the topic turned to housing, Powell stated, the “U.S. housing market activity remains weak.” He said the housing CPI is lagging—and as we go into the spring market, we’ll start to see more disinflation as the housing CPI numbers catch up.
Powell was also asked if he thought banks lending to commercial real estate would be the next banking failure, but he doesn’t believe this will happen.
As far as recession, Powell was adamant that the job market will weaken. This led Bloomberg, among others, to state, “a recession is certain.”
Home Price Growth by the Decade
To end the week, Byron shared a graph that you should show all buyers who have fears about home prices.
The graph shows that over the past four decades, homeowners have consistently gained equity in single-family homes:
- 1990s: 30.2% increase in home price growth
- 2000s: 48.2% increase
- 2010s: 44.5%
- 2020-2023: 39%
In any given decade, you are going to be up on your real estate—on your single-family home—from 30 to almost 50%. We know the average homeowner stays in their house for 11 years. So, buyers who are fearful about where prices are going to go—the question is, are you planning to be in your house for 7-12 years?
Watch the full breakdown of home price growth here.