Some are attempting to compare the current housing market to the market leading up to the “boom and bust” that we experienced a decade ago. They look at price appreciation and conclude that we are on a similar trajectory, speeding toward another housing crisis.
However, there is a major difference between the two markets. Last decade, while demand was being artificially created by extremely loose lending standards, a tremendous amount of inventory was coming to the market to satisfy that demand. Below is a graph of the inventory of homes available for sale leading up to the 2008 crash.
Bottom Line for Lake Arrowhead
We will not have a glut of inventory like we did back in 2008 and home values won’t come tumbling down. Instead, if demand weakens, Lake Arrowhead and the nation will return to a normal market (prox. 6-month supply) with historic appreciation (3.6% annually).
Bob’s Find of Interesting information + copy my data anytime…credit please
ARROWHEAD WOODS sales in the first six month of the last three years have risen from 193 homes sold in 2016, 210 homes sold in 2017, and 214 homes sold in the first six months of 2018. Inventory however has risen from just over 200 homes for sale in 2016 to 278 homes for sale on this date in 2018, counter to the national trends.
National Demand for Homes to Buy Continues to Climb: Arrowhead slower buy steady.
Across the United States, there is a severe mismatch between the low number of houses for sale and the high demand for those houses! First-time homebuyers are out in force and are being met with a highly competitive summer real estate market.
(This is an up to the minute report)
According to the National Association of Realtors (NAR), the inventory of homes for sale “has fallen year-over-year for 36 consecutive months,” and now stands at a 4.1-month supply. A 6-month supply of inventory is necessary for a balanced market and has not been seen since August of 2012.
NAR’s Chief Economist Lawrence Yun had this to say,
“Inventory coming onto the market during this year’s spring buying season – as evidenced again by last month’s weak reading – was not even close to being enough to satisfy demand.
That is why home prices keep outpacing incomes and listings are going under contract in less than a month – and much faster – in many parts of the country.”
Do homeowners realize demand is so high?
With home prices rising across the country, homeowners gained over a trillion dollars in equity over the last 12 months, with the average homeowner gaining over $16,000!
If mortgage rates continue to rise, is selling or buying an Arrowhead vacation home the right choice for you? Answer: Lake Arrowhead is one, two hours from home, a mile high, above the clouds, quiet, casual, clean air, and we believe people life longer and happier here. Question?
Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that after declining for two straight weeks, mortgage rates reversed direction this week and rose to their second highest level this year.
“The good news is that the impact on consumer budgets will be smaller than past rate hike cycles, per Chief Economist Khater. That is because a much smaller segment of mortgage loans in today’s market are pegged to short-term rate movements. The adjustable rate mortgage (ARM) share of outstanding loans is a lot smaller now – 8 percent versus 31 percent – than during the Fed’s last round of tightening between 2004 and 2006.”
Added Khater, “Still, inflation continues to firm and borrowing costs are inching higher. Although wages are slowly growing, stronger gains would certainly go a long way in helping consumers offset these increases in prices and rates.”
$500,000 to $1 MILLION IS CLOSE TO A BUY/SELL BALANCE. THE SPREAD OF PROX. 3.3% DISCOUNT FROM ASK TO SELL IS A HOT MARKET FOR PAST 6 MONTHS.
In Arrowhead Woods, the mid-range of $500,000 to $1 million has the most homes for sale, from the lowest price to the most expensive. How do I know buyers are excited? Paying 96.57% of the asking price is exciting!
The table below illustrates the high demand of buyers with the average home sold in 92 days. In a resort, near two hours drive from home, it’s a quick decision. Next week we’ll look at the luxury end of the Arrowhead market.
2018 MARKET HAS AN UPWARD TREND. SALE PRICES SOFTEN A BIT. IT COULD BE JUST A BLIP. We’ll see.
As we near mid-year and the sales peak of Summer, it seems a good time to prepare for ‘future think’. The table of change in the last three months is telling us that prices are softening in velocity and homes are selling even faster.
New on the market sellers are more confident than ever with Comparable List Prices rising 2% in three months. Sellers are negotiating harder too, with the Median Sale Price giving up only 1.4% from the asking price. We must be cautious in our entheusiasm for the negotiated ask price as the seller may have had one or two previous price reductions.
Economists overall expect the economy will continue to do well this year. But the rise in consumer prices and interest rates could start a squeeze in summer and fall when home buying reaches its’ peak. The rise in interest rates would add about $88 to the monthly cost of a $300,000 mortgage. 30 year mortgage rate at 4.55% & history
April 2018: 42 Arrowhead Woods homes sold. Our vacation market is understood best when viewed as three segments; Cabin, $200,000 to $499,999; Premium, $500,000 to $999,999 and Luxury, $1 million plus. For a change of pace I’ve divided and summarized each segment. Give me your feedback on this new data perspective.