Two Minute Take: May 2024

Welcome to spring - actually, the start of summer!  Traditionally this is the time of the year when real estate is heating up - and that’s still the case.  However, the market has been so hot for so long, any shifts in the market look more like a speed bump and less like a roller coaster.

For many years, I’ve explained in conversations with friends and clients that the market - at least here in Lynchburg - makes small seasonal shifts, not so much grand swings in one direction or the other.  For example, if the weather is nice in February, folks will start looking at homes then. When Daylight Savings ends (or begins, I can never remember) in March, that extra hour of light makes everyone feel like spring is on the way - plus you can look at homes after work.  That moves things ahead.

The market generally picks up speed through the Fourth of July week.  Then, it’s like someone hits the ‘pause’ button, and all goes quiet that week.  After that, activity gradually drifts off the peak through the first week of school in mid- to late-August.  Then after Labor Day, there is a slow descent - like a plane landing - through until the holidays.

All this is true, but even less ‘wavy’ when the market is as hot as it’s been - and still is.  Looking at the numbers from April 2024 vs. April 2023, the indicators point to a strong market for sellers, but with a little more balance than we had last year.

For instance - there are more homes coming on the market now than last year.  New listings are up 21%.  At the same time, the months of inventory is also up 30% (which works out to about 2 more weeks of inventory than last year).  The number of homes that sold in April is way up over last year - almost twice as many homes closed in 2024 as in 2023. 

As a counterbalance to these figures: the number of days it takes a home to sell is up just a bit.  It took the average home 5 days longer to sell this year than last - a welcome relief for buyers who have been looking for over a year.  Also, the average sales price is nearly level - just one data point, but could be an indicator that the years-long rise in home values may be reaching a leveling-off point.

All this while interest rates remain higher than anyone anticipated, and with no clear indicators as to when they might drop again.  Taken together, I read this as a gradual easing towards a more balanced market.  One that, for the time being, still favors sellers, just not as strongly as it did last year.