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What a difference 30 days can make. If you remember, back in June I was talking about it being a bounce-back month because the sales had bumped up and inventory had come down. It was hard to identify a firm trend in the marketplace. I thought we were on our way to a shifting market and that things were cooling, but June turned out to be tremendously active.
For July, there is no question we’re now experiencing a shifting market. Home sales dropped from 105 to 47, and inventory has climbed from 156 to 196. We haven’t seen levels of activity this low during the month of July since 2010, when there were only 32 homes sold.
Since our peak of 95% back in March, the sale to active listings ratio has steadily declined from 67% down to 24%. Anything between 15% to 20% is considered a balanced market, so technically we’re still in a seller’s market, but we’re very close to returning back to a normalized market.
The 15% foreign investment tax has not put a stop to the real estate market. Of all the 47 homes sold in July, the bulk of them sold within the first 10 days of the month. After that, the sales were very much trickling off and we were on our way to a cooling off period regardless of the tax initiative.
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There is no question we’re now experiencing a shifting market.
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For the first time in a long time, we’ve seen our benchmark price drop in July by .8%. This isn’t a significant drop, but it’s still a trend worth watching. We’re up 43% from last year, so homeowners have thus far seen incredibly equitable gains. I expect August, however, to be a much quieter month. Besides the fact that it historically is, many homes in the marketplace are adjusting value and reacting to the shifting market. As that inventory gets absorbed, expect the benchmark value to adjust as well.
What this cooling marketplace means for you as a homeowner is that you have a better opportunity to make timely decisions regarding possibly downsizing, relocating, or selling your home in conjunction with your purchase. We haven’t seen that in a long time, and we’ll continue to watch this trend.
I’ll see you again in 30 days. As always, if you have any questions at all regarding the market, your home, or advice on buying or selling, please feel free to reach out to me by phone or email. Enjoy the rest of your summer.
