The Pandemic Real Estate Frenzy is Over

Let's just call it: The Real Estate Frenzy is Over. The market is normalizing, but there are no signs of any crash anywhere in the data. Here's the details from this week's Altos Research real estate market data and video.

Available inventory of unsold single family homes is up 5.7% this week to 364,000. That's climbing quickly, but not extraordinarily. This week is the Memorial Day holiday so there will be fewer new listings this week.

You can see the inventory gains because we have fewer immediate sales each week. Immediate Sales has been the defining phenomenon of The Frenzy. Still 25,000 homes listed and sold immediately this week. We're looking at 5 bidders on a home instead of 50.

We've had six weeks in a row of declining percent of new listings that go into contract immediately. From 33% down to 23%. As the market normalizes, in July and August, sellers expecting bidding wars who haven't been well prepared by their Realtor will be taken by surprise!

In this chart below see how the far right each end slopes down. Each week we have fewer immediate sales for six weeks in a row.

Still home prices are at a record high. Prices are holding up better than I expected, frankly. $449,000 median price for a single family home in the US. This tells us that buyers are in general still willing to pay the asking prices.

But they ARE getting more sensitive. We see that with price reductions. Normally 30% of the market would have taken a price cut this time of year. But only 23% have as of today. This market is still way hotter than normal. Look at the dark red line below and see how quickly it's normalizing. To sellers in July and August, it's going to feel slow! Especially if they're not well prepared.

Realtors, this is your cue to help your seller be in front of this curve with pricing not behind it. The well priced homes are still selling fast. Use your Altos market reports to help them see this trend in your local market.

Yes, the market is still strong. Price reductions are fewer than normal, but it’s changing quickly, so let’s do this right, set the proper price so we don’t get behind this curve. If you need to have these conversations with clients, go to AltosResearch.com ?and sign up now so you can have your data in the hands of your potential sellers and buyers today.?

More next week.