Once you’re in the market to buy or sell a home, you’re going to notice every little thing you hear about the housing market.
It could be on the TV, a headline or article online, friends, family, coworkers — everyone has an opinion on how the real estate market is doing. The problem is, most of what you hear is based upon national data, trends, and statistics. Even if it’s “local” insight, it’s often still too broad and general.
Real estate markets are very localized. They vary between towns and cities, and from one neighborhood or price range to the next. But, like many other areas around the country, the real estate is seeing some cooling due to rising inflation, interest rates and fears of a recession. That said, the housing market in Green Valley is still healthy and “statistically” a “sellers market” due to continued buyer demand and low inventory.
May 2022 Statistics
For the month of May 2022, the median days on market in Green Valley was just 6 days. The median sales price was just under $300,000 down slightly from the prior month. The overall low inventory will continue to keep prices steady across most price points.
Inventory, the key indicator, was up slightly at 102 active listings as of June 1. Buyer activity has begun to cool slightly, partly due to seasonality, and partly due to rising interest rates. However, the “absorption rate” (supply of homes) remains under 30 days.
Generally, an absorption rate of less than 3-4 months indicates a sellers market; an absorption rate of 5-7 signals a balanced market, and 8-9 months or more indicates a buyers market. The absorption rate in Green Valley has not been higher than a 2 month supply of homes since May of 2020.
The median sold-to-list price, another key indicator, has held steady at 100 percent for more than a year, indicting little movement on price. Over the coming summer months, we are likely to see a deceleration in pricing as a result of interest rates and rising inflation. But with continued low inventory and moderate demand, there is unlikely to be any significant change in the market over the next few months.
Meanwhile, mortgage interest rates held steady at over 5 percent in May, and rate increases by the Feds in June may tip mortgage interest rates to over 6 percent. Rates have increased steadily since the start of the year, and may impact the rate of sales over the next several months.
Bottom line: Don’t base your mindset or decisions on what you casually hear from day to day, or read in the headlines. Regardless of interest rate increases in 2022 and tight inventory, home purchase affordability is still in a historically good place!