RMLS figures for June have been reported again and as usual all the local editorials chimed in. Supply is up from 2.5 to 2.9 months and the market has been coined as “cooled”. But let’s really take a look at those numbers and come to our own conclusion. Yes, supply levels are up, but why? Has demand slowed, has supply increased, what drove that number up .4% from May to June. Well the answer (as often is the case in RE) is, “it depends”.
Demand has slowed from month to month with closed sales down 6.4% compared to May and pending sales down 5.8% since last month. Let’s put these numbers into context though: What “big event” happened in June? School’s Out For Summer…. that’s right, our local market is very cyclical. Even in the hot selling seasons (spring and summer) we get cyclical trends. We tend to see sales absorption slow right after and right before the school year.
Although demand slowed (sales absorption) for the month-to-month comparison of May to June, both closed sales and pending sales are up when looking at June 2012 (11.9% and 15.2%, respectively). Newer listings actually slowed from May to June, so the answer is: the 2.5 to 2.9 month jump in supply levels was due to demand slowing faster than supply, in that comparison.
We still need to consider that new listings are up 16.9% when compared to June 2012, so supply levels are still low even though listings are up over 15%.
Bottom line is this: It’s still a seller’s market. A 4 month increase in supply isn’t scaring any sellers and it isn’t keeping multiple offer scenarios from taking place; there are just fewer of them. The average sales price took a small 1% hit from month to month, but it’s still up over 10% when looking at YTD or 12 month rolling averages.
Yes, the market cooled for a month, and yes, demand has slowed a bit, but it’s still a seller’s market and a tough going for buyers still facing heavy competition in certain markets.