Is it still a sellers’ market? How long until the housing market shifts? Am I running out of time to sell my home and earn the best possible value? Should I wait for the market to change before buying? As the summer fades to an end and we start to enter the fall and winter seasons, these are the types of questions we are asked from our clients, customers, friends and family.
Recently I had the opportunity to attend the annual New England Realtor Committee conference, a two-day event filled with updates from the National Association of Realtors® (NAR), economic reports, and a chance to speak with other Realtors® from 6 different states about what they’re seeing in their local markets.
Because we don’t have a crystal ball to see into the future, we rely on current and past market data and historical trends to best advise our clients on their home purchase or sale. In addition to the monthly local home sales data that we regularly report on, I also want to share some of the key economic predictions and data points that were shared by NAR Chief Economist, Lawrence Yun.
- Home prices are approaching record highs with foreclosures rates close to historic lows.
- Inventory levels have fallen for three straight years and continue to be low.
- Buyer demand is still there, but high home prices and low inventory will lead to a sales slowdown in “some of the nation’s most overheated real estate markets.”
- Yun speculated that interest rates will rise modestly, potentially reaching 5.5% to 6% at the end of 2019 and we shouldn’t expect them to come back down to current levels.
So how does this compare when we take a look at the 16 towns that make up our local market? As you’ll see in the graphs below, residential inventory in 2015 was just under 900 active listings. For the same month in 2016, inventory dropped closer to 600. In 2017 the decline continued to under 600 active listing, and in July 2018, inventory clocked in around 400 residential properties for sale*.
Now, what about home sales? We are still seeing high buyer demand in our local market and home sales are trending in the opposite direction despite inventory levels. In 2015 there were 572 home sales, in 2016 that number increased to 668 and then held strong in 2017 at 666 home sales.
For the million-dollar question; “Where will mortgage interests rates be in the future?” we look to SVP Mortgage Sales Manager at Mascoma Bank, Cathy Murray.
“I monitor several sources trying to predict the answer,” says Murray. “Sam Khater, Freddie Mac’s chief economist is one of those sources. Khater recently stated ‘Mortgage rates are currently 0.82 percent higher than a year ago, which is the biggest year-over-year increase since May 2014. Overall, this spectacular stretch of solid job gains and low unemployment should help keep home buyer interest elevated. However, mortgage rates will likely also move up, as the Federal Reserve considers short-term rate hikes this month (September) and at future meetings.’”
Murray continues, “We have seen a decline in the refinance volume which is extremely rate sensitive. However, nationally mortgage applications to purchase a home, which are less rate-sensitive, rose one percent last week and were four percent higher than a year ago, this is according to CNBC Business News and Finance. This validates my feelings—I don’t see the recent interest rate increase as the sky is falling. People’s lives and circumstances change. They get married, they get jobs or new jobs that require relocation in some circumstances, they have children, and unfortunately, they sometimes get divorced. These changes typically require a housing change, regardless of mortgage interest rates. We are fortunate to live in such a beautiful, prosperous and resilient area. My answer to the million-dollar question; real estate remains a good investment. Borrow responsibly.”
Going back to the questions at hand—I do believe that it is a good time to sell. Echoing Cathy, every client we work with has their own unique reasons to buy or sell, and that decision is highly personal. Given that inventory remains low and we are still seeing a high buyer demand, if personal situations indicate the time is right, then I do encourage people to list their home for sale. Summer is beautiful in the Lake Sunapee Region, but we are fortunate to be located in a four-season destination and we generally continue to see high buyer inquiry activity throughout the fall and even winter months.
As always, if have questions regarding the Sunapee Region/New London real estate market, or if you are interested in selling or buying, please reach out at any time!
Owner/Broker, O’Halloran Group, Keller Williams Lakes & Mountains
President Elect, New Hampshire Association of Realtors®
*Data Source: New England Real Estate Network, 9/13/18.
Data based on the following towns in Merrimack and Sullivan counties: Andover, Bradford, Croydon, Goshen, Grantham, Lempster, Newbury, New London, Newport, Springfield, Sunapee, Sutton, Unity, Warner, Washington, Wilmot.