Prices rise, inventory shrinks in residential market
Sellers anxious to get in while demand high
Local real estate agents could be humming the limbo song these days as dropping inventory has everyone wondering, "how low can it go?"
Prices continue to rise as expected in a low-inventory situation. The median price in March was $255,000, an increase of $5,000 over February, according to the latest data from the Greater Capital Association of Realtors, and 7 percent higher than March 2021.
New listings increased a bit in March, from 866 in February to 1,207 in March — goosed GCAR CEO Laura Burns speculated, by the coming interest rate increases
because sellers want to get their homes on the market before it slows. There were nearly 30,000 showings regionwide, but only 904 closings.
Mortgage rates have climbed more than 1.4 percent since January and now stand at the highest they've been in three years.
“The rates of the last two years were an anomaly due to the pandemic," Burns said in a statement from GCAR. "Buyers and potential buyers should keep in mind that historically, a 5 – 7 percent rate is still low for a 30-year fixed rate mortgage – nowhere near the 16 percent rate buyers dealt with in the early 1980’s. It’s not the 2 – 3 percent of 2020 and 2021 but that was a forced low rate to keep money moving during the pandemic.”
Inventory of homes for sale at the end of March totaled 1,547 units, down 44.6 percent from one year ago. Unsold inventory sits at a 1.3-month supply at the present sales pace, down from 2.2 months in March 2021.
Builders can't keep up with demand. New construction experienced a nearly 20 percent increase in median sale price over 2021. It was $470,818 in March in the Capital Region.