t is always important to understand one’s local market within the broader context of the U.S. housing market on a whole.
I’m going to take a look at the county I reside in specifically as some data caught my eye and, well it doesn’t look all that reassuring.
Sales and Prices Down from a Year Ago
Looking at the infographic below a few things jumped out at me fast.
- The number of closed sales is down almost 10% for single family homes compared to February 2018.
- Median sales price is actually down 1.4%, something we have not seen much of in recent years
- Days to contract is up 13% and inventory is up 10%
Townhomes and Condos seem to be holding up a bit better and prices are up 7.6% so that is good. Especially considering in South Florida that is a large majority of the housing and what most retirees and snowbirds buy when they relocate or winter here.
Cracks in the momentum
Either way though, we are starting to see some cracks in the upward momentum of the real estate market and this is even with interest rates diving lower again. The 10-year yield, which is used to set 30 year mortgage rates is below 2.5% again after cracking 3% early in the year. I’m very curious to see what the market would look like had that rate stayed up above 3%.
Know Your Market
As mentioned earlier, know the markets you are investing and living in. Combine that information with broader market trends.
Something like the lower interest rate environment is a positive for the entire market, however if we are seeing a slowdown in momentum in many markets despite that fact it is something to keep an eye on.
Home affordability is becoming a problem even with interest rates down, what happens if we get another uptick?
Remember, this is you we run the numbers on any rental property you consider purchasing – it keeps us from overpaying and buying a non-cash flowing property.
If you don’t know how to buy right then be sure to read ScaredyCatGuide to Investing in Rental Properties.