After 2 years of inventory halfing year-over-year, the number of houses for sale is climbing rapidly and I couldn’t be happier. “But John, you stalwart yet sensitive archetype of masculinity,” I hear you ask, “isn’t this a sign prices are going to ‘adjust’?” Well, dedicated reader, I certainly don’t have a crystal ball, but even if listing inventory were to double for the next 2 years we would still be in a market similar to 2019. Was that a great year for real estate? No, but it was certainly above average. Also, consider the fact we only have 2 months of inventory. That would multipy by 3 and we’d still only be at the border of a buyers and sellers market. See the graph below which reinforces my point. We’ve got a long way to go to even get close to 2019.
It’s quite possible interest rates will end up in the 7’s by year’s end. I wouldn’t necessarily call this permanent, although since 1971 the average 30-year fixed mortgage rate is right at 8%, and once inflation is tamped down (we’re nowhere near that) they’re likely to settle, hopefully sub-5 but probably not. This is all just my speculation.
I’ve started using median numbers instead of averages on page 2 of the newsletter. After a heated discussion with one of the statisticians at Texas A&M (never argue statistics with a statistician) I’ve decided to make the change because averages tend to exagerate statistics. Also, the powers that be stopped breaking down DFW home sales into single-family, condos and townhomes so the information I’m able to supply is going to be somewhat dimished. Make all the A&M jokes you want in lieu of this information.