Weekly Special | September 9, 2018

Will Sticker Shock Slow Buyer Demand?

One segment of the housing market that is difficult to track are those sellers who are “fresh” to the market (meaning they have not tried to sell their home in recent years).

Fortunately, we developed a process to measure this back in 2012, and it allows us to closely monitor seller expectations by removing most distressed and stale properties that have been around for a long, long time.

The graph above shows the median asking price and median asking value of fresh listings each month going back to the end of 2012.

Over the past five years, we have seen the median asking home price move 27% higher, while the median asking home value has pushed 28% higher (meaning the median home has appreciated at an annual rate exceeding 5%).

This is not a surprising trend, as the market over-corrected from the last up cycle and we have developed an inventory shortage that is pushing home values higher.

Will Buyers Suffer Sticker Shock?

Anytime we see prices rise rapidly, we anticipate seeing a cooling off from buyers due to “sticker shock.”

Unfortunately, low inventory of homes means that while they wait, prices and interest rates are just moving higher.

The original one-page Weekly Special PDF is still available.