Interest Rates vs Inventory Rates
The residential real estate market throughout the capital region remains fast-paced and challenging to buyers with the median sold price hitting a new high and time on market at a new low. The median sales price reached $279,000 last month, up about 11 percent as compared to last year and up nearly 19 percent over May 2020. On average, homes spent just 30 days on the market, down by 11 days from the same time last year and down 34 days from May 2020.
The percentage of original list price received at sale rose to 102.4 percent indicating that buyers are still willing to pay top dollar for homes as inventory remains slim. In May there was just a 1.5-month supply of homes for sale. This was a 32 percent decrease from May 2021.
New listings decreased 8.2 percent from May 2021 to 1,641 for the month. However, more new listings entered the market in May than any other month since August of last year.
The total number of homes for sale was down 42.5% percent to 1,655 units from May 2021. However, this has improved from last month’s 51.5% decline. Greater Capital Association of President, Kendal Baker, Broker-Owner of Markers Octagon Realty stated “Any increase in inventory is positive news, especially during the summer months. For a variety of reasons, new construction is still lagging behind on the current demand for homes”.
Pending sales decreased 13 percent from May 2021 to 1,299 for the month. Closed sales were down by 15 percent from May 2021 to 902 for the month. Still, buyers, sellers, and REALTORS® had a busy May with more than 28,000 showings conducted. New construction’s median sale price rose by 37 percent over May 2021 to $502,806.
Greater Capital Association of Realtors® CEO, Laura Burns, commented “The reduction in some of last month’s numbers is the result more of the continued lack of inventory rather than the increase in the historically low-interest rates. While the Fed’s recent rate increases may edge out some potential first-time home buyers and others on a tight budget, at this time, lack of inventory is still pushing sale prices to exceed list prices.
There is still some uncertainty about how and when the real estate market will adjust but for the summer months, sellers in the Capital Region remain in a good position and rates remain affordable.