Market Update April 22nd, 2024

In recent market analyses, there has been a significant observation concerning real estate pricing: the average price per square foot across various regions and property types has once again surpassed the $300 mark. This resurgence in pricing is an important indicator of the current market dynamics, which seem to reflect a recovery from past fluctuations. Such a milestone is crucial for both buyers and sellers as it affects overall market sentiment and could potentially influence future pricing strategies and real estate investments.

The historical context of this pricing trend is marked by a peak record of $306.39 per square foot on June 10, 2022. Following this high, the market experienced a notable correction of 14%, plummeting to a low of $263.83 by January 17, 2023. This downturn was significantly driven by a wave of inventory sell-offs from iBuyers, highlighting a period of volatility within the real estate sector. Such movements are vital for understanding the ebb and flow of market conditions and can guide future investment and selling decisions.

Since the start of 2023, there has been a gradual and steady increase in the average price per square foot. Comparatively, the price was $279.86 a year ago, and over the past twelve months, it has witnessed a growth of 7.3%. This upward trajectory suggests a stabilizing market that is slowly regaining its strength after the previous year's challenges. Observing such trends is essential for predicting the short-term movements in the market and for strategizing accordingly.

Looking ahead, the market is poised at a critical juncture. With current prices needing only a 2% increase to set a new all-time high, there is palpable anticipation about the potential for reaching new milestones. This impending possibility could play a significant role in shaping market strategies, affecting everything from individual buying decisions to broader investment perspectives. Such a scenario underscores the dynamic and ever-changing nature of real estate markets, making it imperative for stakeholders to stay informed and agile in their operational approaches.

With all this information that seems to be positive in a hostile rate environment, let me ask you, do you think pricing will only go up if mortgage rates drop drastically? If inventory stays close to current levels then yes I do, I think rates dropping will only cause a secondary boom when buyers who have been on the sideline waiting, rush to make offers, as well as sellers who are trapped in their low-interest rate homes.

"In three words I can sum up everything I've learned about life: It goes on."
— Robert Frost

Have a great week everyone!