There is an interesting disconnect happening in the market. The results of a recent Fannie Mae poll showing 9 in 10 Americans said May was a bad time to buy, which turned out to be a new high for survey records going back to 2010. 14% of those polled in May said it was good time to by, which dropped from April’s 20%, matching the percentage for November 2023.
Interestingly, 64% of those polled in May said it was a good time to sell (down from 67% in April – which was the highest level in 2 years).
So what’s happening here? If most people think it’s a bad time to buy, how can 2/3s of the people think it’s a good time to sell? A sale requires a willing buyer. Inventory is still low in many areas, hence the relatively steady higher prices. But one might argue you’d have to live under a rock to not know about the higher interest rates, insurance challenges in many parts of the country (including our little island), and perpetually higher property taxes (shout out to all you vacation rental owners who started getting a second tax bill this year). Shouldn’t there be somewhat of a consensus that if it’s not really a great time to buy, it’s probably not a great time to sell either?
I wish I had the answer for you. I can say real estate is cyclical. Sometimes we’re up, sometimes we’re down. Sometimes it’s a seller’s market, and sometimes the buyers are in control. It’s my belief that it will all flesh out eventually. And since it is unlikely we will have any significant relief in rates, insurance or taxes anytime soon, my expectation is the downward pressure on prices will expand to areas that still don’t have a lot of inventory, if the lack of selling activity continues. It’s just basic supply and demand.
Ocean Grove Condominiums had an equal number of sales at higher list prices this quarter than the same time last year.