The headline read “Half a million. That’s not a headline number; it’s a warning signal.” The post continued “Right now, there are ~509,000 more home sellers than buyers in the U.S. market. Not hypothetically. Actively.” Hmmm….since real estate is local, let’s look at Galveston facts instead of national hype.
As of the time of this writing (mid-January), there were 279 condos listed. Last year, 271 condos sold. The table shows the previous years’ sales. There is no mistaking the pandemic run up, and subsequent post-pandemic run back down. And it is also clear sales the past 2-3 years have dropped considerably below pre-pandemic levels. You know why because I’ve told you, and because you’ve probably heard it in the media. But here’s the rub. If there were 271 sales last year, that means there were 271 buyers. And if we currently have 279 condos listed, that’s almost a buyer for every active condo. Feels a bit different from half a million more sellers than buyers, doesn’t it? Now, we are still very much in a buyer’s market. The Absorption Rate (AR – the rate at which properties are sold in a given period – monthly in this case) is almost 12%, with Months of Inventory (MOI – how long it would take to sell current inventory if no other condos came on the market) sitting at almost 9. AR is speed; MOI is duration. Anything over 6 MOI is considered an oversupply and a buyer’s market.
I tell you all this for a couple of reasons. 1.) To remind you real estate is local. Don’t get caught up in national media hype and doomsday headlines. 2.) Real estate, like any other market, is cyclical. Some years you are up, and other years you are down. If you bought during the 20-21 frenzy, it’s probably best not to try and sell until we are back in an upswing. (Spoiler alert: We probably won’t come raring back. I expect a more measured increase in sales.) If you didn’t sell during the 20-21 frenzy and wished you had, sorry, you missed the boat. It’s okay though. It doesn’t mean you can’t or won’t sell. It just means you have to price for today’s market, condition will likely be more important because you may have some competition, and you can’t expect to be in the dominant negotiating position (9 MOI). They say nothing good lasts forever. The good news is, nothing bad does either.