Let’s talk about the elephant in the room. You know the one; it’s that large grey animal with the long trunk and the floppy ears that is taking up most of the living room and everyone is trying to pretend is not there. Let’s just acknowledge him. We might as well. It’s getting uncomfortable trying to walk around him and, frankly, he’s not going anywhere ... at least for now.
Allow me to introduce Mark, the elephant. His name, Mark, is short, of course, for Housing Market Shifts. He meandered into the living room quite unexpectedly and hasn’t moved for the last few weeks. Having studied this particular elephant’s behavior for some time, I, as well as many other seasoned elephant trainers, thought he would just quickly pass through. Based on past behavior, at the beginning of this specific season of the year, Mark generally just takes a quick glance around, grabs a snack and then moves on through. Not this year. This year, Mark appears to have set up camp. He’s getting comfortable, and he may stay awhile.
Throughout the past year, we have seen rampant housing shortages throughout most of the nation. This current year opened with one of the most competitive housing markets in recorded history. In many local markets, sellers could almost name their price and receive multiple offers within hours. The housing shortages as well as improved economy and low unemployment have all been contributing factors to higher housing prices. The expectation was for this trend to continue ... until Mark decided to have a seat ... right in the middle of the living room.
As a result, recent reports are suggesting that the forecast for this trend to continue may have missed the proverbial “mark.” The past month has shown a slight weakening of demand. Does this mean the market is cooling down?
That term, “cooling down,” is relative. This week I listed a property that resulted in seven offers during the first day of showing. Three months ago, we would probably have had between 10 and 12. This was, however, a unique and highly desirable property. For the average home and property, we are seeing a longer number of days on the market, price reductions and fewer multiple offers.
This begs the question, as the weather cools, is the market going with it? Mark is an uninvited guest. Should we welcome him or get him on out of there? Either way, he’s sitting in the living room right now. If I were a buyer, I would take advantage of Mark because, my forecast, from the Book of Jen (take it for what it’s worth), says Mark is going to need some fresh air pretty soon, and we all know he’s not going to find it here, given our history for inversions. He is not going to be here for long.