What if you could get ahead of the curve and navigate the complicated real estate market with ease? This week, we're serving up some much-needed clarity about the housing market dynamics that are shaping the current landscape. We'll examine nationwide and regional data, highlighting essential factors like inventory and affordability. You'll get to hear about intriguing trends, from a decrease in mortgage purchase applications to the higher medium home sales price.
In the latter part of our conversation, we discuss a fascinating study from CNN Business. It reveals how the emergence of remote and hybrid work is transforming housing trends. Discover how workers' eagerness to relocate to more affordable areas is making waves in the real estate sector. We'll also touch on the importance of understanding the regional variance in affordability and how it can significantly impact your property investment decisions. This episode is packed with valuable insights to help you make sense of and successfully navigate the complex real estate landscape. Tune in now!
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Remote workers are now moving in to find affordable housing. Is that a sign that home buyers are now coming back? Find out more in this week's weekly real estate market update. But before that, here's this week's housing market data. Mortgage purchase applications are down 2% from a month earlier, seasonally adjusted, while purchase applications were down. A whopping 28% from a year earlier Makes a lot of sense. As inventory is creeping up, prices are going up and staying up. Affordability is going down. Google searches for homes for sale were down 11% from a month earlier and down about 16% from a year earlier. Medium home sales price was $378,725, up 4.5% from a year earlier. That's the biggest increase since October 2022. So here's something that's really important that you need to know. These are nationwide numbers, while real estate is extremely localized and regionalized. It's important that you understand that. Look at the data in your market. While, for instance, here in the Poconos in Pennsylvania, the market may appear that is going up, the whole time is also going up significantly, which eventually will lead to a price drops on the marketplace, while just up the road, in the Lehigh Valley market, they're still getting multiple offers. I'm talking to realtors and investors in some other markets that are still seeing multiple offers on property. So make sure you study your own market. Look at your region and see what's happening there. The median asking price for a newly listed home was $379,747, up 3.7% from a year earlier. That's the biggest increase since November of 2022. The monthly mortgage payment and the median asking price was $2,612 at a 7.18% mortgage rate. I just finished meeting with my banker and for commercial rates, they're at about 7.5, 7.75 for the larger commercial rates. Now this is different as this is talking about 30 year mortgages for regular home buyers. So this is pretty high when you compare it to what's happening as well with the pricing the median asking price. So this is an affordability word, literally in an affordability crisis right now as it pertains to real estate. In my opinion, I think we're in the eye of the storm right now, in the middle or the second quarter, coming to the end of the third quarter of 2023. So let's see what happens here in the coming months and early 2024. Pending home sales were down 13.3% year over year, continuing a 15 month plus streak of double digits decline. So pending home sales this makes sense. We're in an affordability crisis. So seeing pending home sales coming down that data coming down. That makes a lot of sense. As interest rates go up and prices are staying strong there In the country. That makes sense. New listings of homes for sale fell 9.3% year over year, the biggest decline since February 2022. Active listings dropped 18% from a year earlier the biggest drop since 2022. So this one is interesting. Active listing dropped as a nation, right Again, very regional, very localized. Look at your local MLS, look at your local market to determine what is actually happening. Here in the Poconos. We're seeing inventory go up. We're also seeing data shows prices going up. However, I'm also seeing that properties that are over $300,000 are just sitting on the market, just sitting, sitting, sitting. So active listing drops by 18% across the country is interesting. That means inventory is not creeping up as a whole in the country. 39.3% of homes that went under contract had an accepted offer within the first two weeks on the market. Homes that sold were on the market for a median of 29 days and 35% of homes that sold above their final list price. And CNN Business reported the study, which was an analysis of Vanny May's monthly national housing survey, which questions asked amongst more than 3,000 mortgage holders, owners and renters between January and March this year. Look at how remote and hybrid workers has changed over the past few years and is impacting on the housing market. So this is an interesting article that I like to share with you about how remote work is affecting real estate. And it goes on to say more people are willing to move to less expensive areas further away from their offices and the city centers than a few years ago. According to the report, continuing remote and hybrid work at levels remarkably unchanged from two years ago is enabling people to move towards housing affordability, the study found. So, guys, this goes right in line with what I mentioned earlier about affordability. We're in an affordable market with these rates and these prices, so people are moving. These remote workers makes logical sense to me. Remote workers are moving to more affordable places. Hey, we want to move to Scranton or Wilkes Bay or one of those areas where I have properties that have brand new properties. Come check us out, just kidding. The report also revealed that affordability is the most important factor in finding a place to live, both from renters and homeowners. At the beginning of the year, 22% of remote and hybrid workers said they would be willing to relocate to a different region or increase their commute, only 14% such workers were willing to do so in the third order of 2021, which is used as a comparison throughout the study and was when many workplaces attempted a return to work until the Omnicon variant of COVID-19 pushed many employers pushed plans back. That went, so Workers who are able to break their ties to living in the area are, because of its proximity to work, are able to spread out, reducing the competition for historical low numbers of homes for sale that could push prices even higher. This podcast is broadcast around the world and around the country and while some markets might be hotter than others, again going back to local and regional areas. Florida, for instance, in certain markets are still hot. California and certain markets are still hot and other markets are getting killed, like I just expressed earlier, pocono Mountains slowing down, while Lehigh Valley, just a few minutes up the road, super hot. So it's very regional. It's very important that you study the data as you make decisions on whether you're buying a home or you're investing in a property or an asset. It's important that you understand the data and where migration and what is happening. The research showed that amongst remote workers, all age and income groups have grown more willing to relocate or live further away from their workplace since 2021. But younger workers, those between the ages of 18 and 34, are significantly more willing than those older than them to live or commute a further distance from their work, with the share willing to do so jumping from 18 to 20, 18% in 2021 to 30% in 2023. This is good news for remote workers. During the time of rushingly low levels of home affordability. There goes this article kind of agrees and concludes with my statement of home. Affordability is just out of the window, guys, and what I'm finding is that more properties in the affordable range and that depends market to market, region by region. Again, I keep going back to that you might live in a small town in Idaho where an expensive house might be 250. Wow, a 250 house is affordable here in the Poconos. You might go then to California and for 250 in LA, you're going to get a distressed house right that needs $300,000 worth of work. So be very attentive to the fact that this is going to be dependent on your area and how that and what affordability means to you in your area and in the market that you want to buy a house in or the market that you want to invest in. And this has been your weekly real estate market update. I'll see you guys next week. Thank you guys for watching and or listening. Appreciate you, thanks.