Hey everybody, it's your friend, Kyle Winn, and if you’ve never seen my videos I help people just like you buy and sell homes in places like Canyon Lake, Menifee, Lake Elsinore, and the rest of Riverside County. So here we are now in September 2022, and that means I’m ready to deliver your market update for the month of August! Let’s get to it!
Thanks so much for stopping by because I'm really excited to bring you this market update report for Riverside County. So let’s dive in and see what happened in August!
The number of new listings hitting the market each month is important because that is our housing supply, and we need to make sure enough homes are available for the buyers out there. The number of new listings was 3398 in August, which is about the least we’ve seen all year in Riverside County. But don’t let this surprise you or get you worried. It’s common for the number of new listings to peak around May or June, and then decline throughout the rest of the year, but it does seem to be declining quickly this year.
Now the number of closed sales in August was 2580, which is up from 2363 in July. What if we compare this to the number of new listings that I just told you has been decreasing? Well when we see a decrease in new listings and an increase in closed sales, we’ll see an overall decrease in inventory, and competition among buyers gets more difficult. If this goes on too long homes will sell very quickly and for over asking price.
Speaking of how long it takes for a home to sell, the median number of days on market for properties here in Riverside County was at 21 days in August, and this has been steadily increasing since May. This tells us that this is the longest it has taken to sell a home since August of 2020, but it’s still quick! For some perspective, over the previous ten years we would expect the median number of days on market to be between 30 and 60 days. So even at 21 days homes are still generally selling pretty fast.
Now for months’ supply. This is how long it would take to sell all the properties that are currently listed knowing the current buyer demand if no new listings came on the market. This has been climbing from 1.3 months in January up to 2.4 months in July, and 2.4 months again in August. An increase makes sense when there is an increase in new listings and decrease in closed sales. But I told you that in August we saw a decrease in new listings and an increase in closed sales, and the months’ supply has leveled off. In a healthy, balanced market the month's supply would be between four and six months. But with the months' supply this low we're still not seeing enough supply for all the buyers that we still have right now, which is a seller’s market. And if months supply starts to decrease, there may not be relief for buyers for a while.
Now for one of the most popular topics: average sale price. Here in Riverside County the average sale price hit a low for 2022 at $637k in July, but then jumped up to $647k in August. Remember that this hit an all time record of $711k in April and even an increase to $647k in August may seem low, but keep in mind every year the average sale price tends to peak between April and June, and it is not uncommon for that to decrease 5 - 10% over the following 4 to 6 months. We may expect the average sale price to decrease a bit more over the next couple of months, and if history repeats itself the average sale price will begin to trend up late in the year and into 2023.
For another hot topic, let’s discuss mortgage interest rates. We started the year with the average 30 year fixed mortgage interest rate at 3.45% in January, which increased every month to its peak so far this year at 5.52% in June. That has since declined to 5.22% in August. Now I know a lot of you are talking about how “high” interest rates are at the moment, but if you do a little research you’ll see that nobody got an interest rate below 5% until 2009 or 10 after the housing crash in 2008. In the early 2000’s interest rates were in the 6-7% range, in the 90’s they were 7-9%, and in the 80’s they were as high as 18%! So if you’re looking to buy just know that even at just over 5% today interest rates are still very low!
Well I know I'm going to keep studying the market here in Riverside County and I'll continue to deliver updates for you. I suggest you keep an eye on mortgage interest rates and the months' supply of active listings to give you an idea of where the market may be heading. Well that wraps up my August 2022 market update, but if you have any questions or need help buying or selling give me a call, text, email or drop a comment below.
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