Home sales were down 29.0% in October compared to the same time a year ago. The drop in sales can be attributed to two major factors in today’s market.
First, the 2021 market was the best ever and it would have been very difficult to repeat or surpass it. Year-to-date, there were 17,300 homes sold, compared to 19,403 a year ago, and 18,188 in 2020.
Second, the upturn in interest rates that began in earnest last summer have started weighing down the market. Rates are 6% - 7% currently and were around 5% in June.
Some market-watchers may be expecting prices to decline as a result of recent headlines, but that is not the case.
REALTORS® have been reporting solid interest among buyers, although first-time buyer searches have cooled down. Also, listings in October were down across the metropolitan area and region – with one exception, Ozaukee County.
That combination has pushed average sale prices up 9.4%.
There are certainly inefficiencies in today’s market (i.e. lack of new inventory), however, we are nowhere near the start of another Great Recession in housing, because buyers have excellent credit, we do not have any speculative inventory, and employment is strong, among other factors.
