Will Cooler Weather Bring A Cooler Market?
As fall hits the northeast cooler weather turns the leaves and often the real estate market. In the Capital Region competition remained strong last month impacting prices and inventory numbers. Pending sales were 1,177 a 31 percent change from August 2020. Closed sales slowed by 9 percent down to 1,352 from 1,485 in August 2020. Sellers contributed 1725 new listings into the mix for busy REALTORS® in August.
Nationally, the story is the same. “Sales slipped a bit in August as prices rose nationwide,” said Lawrence Yun, National Association of REALTORS® chief economist. “Although there was a decline in home purchases, potential buyers are out and about searching, but much more measured about their financial limits, and simply waiting for more inventory.”
NAR reported the median existing home price for all housing types in August was $356,700, up 14.9 percent from August 2020. Though the Greater Capital Region’s median price was comparatively lower than the national average, the percentage of increase was nearly the same with a 13.8 percent increase over August 2020. As Mr. Yun reported, this marks 9.5 years straight of year-over-year gains. Buyers remain present in the market, but inventory, affordability, and back-to-school preparations sometimes have a decelerating effect on sales in late summer. Still, sellers received 101.3 percent of the original List Price for their homes in August.
Without a strong addition of new homes added to the inventory, pricing will most likely continue to rise throughout the fall. August’s inventory declined by 19.4 percent (2.5 months supply). Builders’ efforts brought 116 new homes with a median sale price of $402,379 to the local market last month, a decline of 56 percent year over year. Across the country home builders continue to struggle to meet buyer demand. According to the Commerce Department, housing starts nationwide dropped 7% last month. Labor shortages, increased material costs, and supply-chain setbacks continue to challenge builders. Some are temporarily pausing projects due to availability and the cost of materials.
As the region and the rest of the country prepare for cooler weather and more indoor activities, health concerns loom large as summer hits the rearview mirror. Vaccination rates, challenges with new variants, and the “new normal” of working at home may continue to impact the Capital Region market with the fervor of first-time buyers and renters who want to spend this winter in their own homes.