Has the Lochwood market peaked? Let’s take a look at how it performed in May!
Year-over-year numbers indicate that there is has not been a significant shift in our neighborhood market:
- Inventory is still very low. It is higher than last month, but it’s normal to see more houses listed in May, June and July.
- The number of days a home is on the market before going under contract is unchanged.
- Closed sales, pending sales and the number of showings on a house before it goes under contract are all very similar to last year.
- All of the sales that closed in May were at 100 percent or more of the seller’s asking price (list price).
- Home sales that are pending (likely closing June 2022) were not on the market for very long before going under contract. This is typically an indicator that they will sell at or very close to the seller’s asking price.
The one big difference in the chart below is Median Sale Price. Sale price is where you see the biggest jump and I don’t think that’s a big surprise to anyone. If you’d like a real life example of how quickly prices are appreciating in our neighborhood, read the blog I posted for the sale of 11720 Farrar.
Showings per listing peaked in February – right before interest rates started going up in March – and have declined for three consecutive months. Here’s how those numbers break down:
- February = 19.8
- March = 14.3
- April = 10.8
- May = 8.3
This indicates that fewer buyers are shopping. It’s likely that higher interest rates, which are forecast to keep inching up throughout the year, are causing some buyers to stop their search. However, the number of showings on a listing before it goes under contract are about the same as last year. It’s my opinion and experience that serious and motivated buyers are still out there looking and when they see something they like, they put it under contract.
Higher interest rates and fewer buyers (demand) do have the potential to put downward pressure on sale prices. That does not mean that I believe that home values will go down in the near future. There is still far too little inventory or supply for that to happen. These dynamics of interest rates, supply, and demand could cause sale prices to level off. This is what our market experienced in 2017, 2018 and 2019…..a slower rate of appreciation.
Here’s a snapshot of the sales that closed in May:
A word on the “teardowns” on Farrar and Lochwood….because someone did ask for my take on it….
I know there is a lot of chatter in the neighborhood about not wanting McMansions in our neighborhood and I am not going to comment on that one way or the other. What I will say is that buyers who want 3,000+ square feet of new construction, on our side of the lake, cannot get into it without spending at least $900K or more. Builders are building this type of housing because there is demand for it, and the higher prices go on the west side of White Rock, the more we will see people pushed to our side of the lake. The one thing that the homes on Farrar and Lochwood have in common is that they were never put on the market. They were sold off market to builders so home buyers and flippers never had a chance to bid on them. Do I think we will see more of them in neighborhood? Yes, I do.
That’s my recap for now. I hope you’ve found the information and insight helpful. I also hope that you can see the level of detail I go to when advising my clients. I make every effort to resolve “issues” before they arise and to make sure my clients have all of the information they need to make the best choices for themselves and their family. Have a wonderful day!
In your service,