There are many headlines out there that claim we’re reverting to a more normal real estate market. That would indicate the housing market is returning to the pre-pandemic numbers we saw from 2015-2019. But that’s not happening. The market is still extremely vibrant as demand is still strong even while housing supply is slowly returning. The same holds true for RCFEs
Here’s the definition of normal from the Merriam-Webster Dictionary:
Conforming “ to a type, standard, or regular pattern: characterized by that which is considered usual, typical, or routine.”
Using this definition, here are five housing industry metrics that prove we’re nowhere near normal.
- Mortgage Rates
If we look at the 30-year mortgage rate chronicled by Freddie Mac, we can see the average rates by decade:
- 1970s: 8.86%
- 1980s: 12.7%
- 1990s: 8.12%
- 2000s: 6.29%
- 2010s: 4.09%
Today, the average RCFE mortgage rate stands at about 4.80-5.25%, which is very close to the historic low.
Currently, mortgage rates are anything but usual, typical, or routine.
- Home Price Appreciation
According to Black Knight, a housing data and analytics company, the average annual appreciation on residential real estate prices since 1995 has been 4.14%.
According to the latest forecast from the National Association of Realtors (NAR), residential price appreciation will hit 14.1% this year, which will be greater than any year since Black Knight began collecting this data.
Currently, home price appreciation is anything but usual, typical, or routine.
- Months’ Supply of Inventory (Homes for Sale)
We have much less than normal supply of RCFEs. There are no actual statistics for RCFE homes that we are aware of, since many are off market transactions.
Currently, the supply of RCFE homes for sale is anything but usual, typical, or routine.
- Days It Takes To Sell a Home
The days-on-market metric gives an indication of how hot a market is and how quickly homes are selling. In 2019, prior to the pandemic, the average days on market for typical residential homes stood at 35, according to NAR. Today, that number is cut in half and is now at 17 days. Again, there are no statistics for RCFE homes, but we have noticed the trend is for fewer days on market, as unspecific as that is.
Currently, the days-on-market metric is anything but usual, typical, or routine.
- Number of Offers per Listing
We receive on average about 2 offers per listing, as compared to 1 previously.
Currently, the number of offers per listing is anything but usual, typical, or routine.
Bottom Line
When…
- Mortgage rates are near historic lows
- Price appreciation is at historic highs
- Housing inventory is less than half of the normal amount
- The time it takes to sell a home is cut in half, and
- There are twice as many offers on each house
…it’s hard to say we’re in a normal market.
If you are considering buying, selling or leasing an RCFE, please call us TODAY to explore your options. We would be delighted to evaluate your business and provide price guidance. We will help you obtain the highest possible price for your RCFE.
Michelle (949) 397- 4506 & Melvyn (949) 500-3630
