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More Homes Needed, Please! Main Photo

More Homes Needed, Please!


Your Local July Housing Market Report
Posted: July 29, 2020 by Jessica Wimberly

MORE HOMES PLEASE…AGAIN!

I’ve been writing these monthly posts for a couple of years now and love it.

I have to admit that I’ve become a little bit of a stats nerd. I now find myself thinking about how the numbers will come in each month. Here is what I thought would happen this month in the U.S.:

Sales: I predicted a national rise of 15%. I had the right idea but was a bit off. The National Association of Realtors just reported that sales rose a record 20.7% over May! Wow! The early impact of COVID-19 that saw sales drop to really low levels created pent-up demand.

Prices: I predicted they would rise 5%. I figured that if there were more buyers and not as many homes to choose from, supply and demand would increase the median home price nationally. Well, I was a bit off. It rose 3.2% to a whopping $295,300. That means that the middle of all of the homes sold in June was just about $300,000! Thankfully, we live where we do! You will see what I mean in a second.

Supply of homes: I crystal balled that the inventory of available homes for sale would drop 10%. Whoops. Way off. It dropped 18.2% nationally. This means that there are not enough homes for sale in the U.S. Imagine looking for a home today and there are 20% fewer to choose from? For us, it’s even tougher. That’s what is happening.

Our inventory levels in Northwest Louisiana are incredibly low. In fact, they are at record low levels. Last year at this time, there were 2,066 homes on the market. Today, we have ONLY 1,439. We are down 30%! This is a really low 3.6 month supply. And in most of our price points, the supply is even lower! 

If you are thinking of selling your home in Shreveport, Bossier, Benton, Haughton or anywhere else nearby, now might be a great time and you should give us a call.

Here is how this lack of supply plays out:

·       Buyers want to buy: Even during the pandemic life events are occurring that drive homeownership (engagements, wedding, kids, jobs, divorce, illness, etc.) along with military PCS and the desire to “move up” or “downsize”.

·       Mortgage interest rates are at an all-time low bringing even more interest.

·       These buyers identify their wants and price range they can afford.

·       They view online listings, watch videos and 3-D tours, learn and tour homes with their agent.

·       They decide on a home they want and work with their agent to make an offer.

·       In many of our popular neighborhoods and price ranges, the seller receives multiple bids on the home.

·       The seller has the advantage.

·       Buyers who lose the “bidding war” start the process again.

We have the demand, but not the supply.

Overall, our prices remain SO MUCH BETTER than the overall U.S. The year-to-date median price in Caddo, Bossier and Desoto Parishes is $174,900, up 1% over last year. We are $120,000 less than America!

Obviously our affordability level is enticing. Remember, COVID-19 is showing that many of us can work remotely. So those who want the incredible lifestyle benefits we have in Northwest Louisiana can now live here and work somewhere else. And save a ton of money!

This could be another reason why sales are so strong here. In fact, June was the strongest June since 2006!  There were 508 homes sold last month in our market, which was up 11% over last June but up 26% increase over May. We BEAT the U.S. number!

This chart shows the sales in the various price ranges from May to June. Look at what is happening. Every price range outside our lowest jumped dramatically in sales. I also added in the inventory level for each which shows how low we are compared to last year at this time:

Price Range

2020
May Sales

2019

June Sales

% Change

Month Supply (June 2020/

June 2019)

Total

403

508

+26%

3.6/5.4

Under $100,000

107

103

-4%

3.1/4.3

$100,000-$200,000

158

190

+27%

3.0/4.5

$200,000-$300,000

92

137

+49%

3.0/5.0

$300,000-$400,000

31

39

+26%

5.2/7.6

$400,000-$500,000

9

21

+133%

7.2/11.5

$500,000+

6

18

+200%

13.9/19.8

 

I have a theory about why the lower range went down in price. Mortgage rates are so low that those entering the market are able to afford “more house.” Therefore the interest in that range has dropped a bit.

This chart helps explain my theory. Look at how much more money you have a month to use or save for the next 30 years at the national average of 2.9% rate today (compared to January’s 3.75%). If I were a first-time buyer who had steady income and wanted to stay here for a bit, I would be super excited. Home ownership is cheaper than renting:

Mortgage Amount

July 2020 Monthly Payment

January 2020 Monthly Payment

Savings per month for 30 years

$100,000

$416

$463

$47

$150,000

$624

$695

$71

$200,000

$832

$926

$94

$250,000

$1,041

$1,158

$117

$300,000

$1,249

$1,389

$140

$350,000

$1,457

$1,621

$164

$400,000

$1,665

$1,852

$187

$450,000

$1,873

$2,084

$211

$500,000

$2,081

$2,316

$235

 

Hopefully this post is showing that the most important thing to our local housing market is the need for more homes to be listed.

Let’s wrap up and compare Northwest Louisiana to the U.S.

 

U.S.

(change over June 2019)

Northwest LA

(change over June 2019)

Median Price

$295,300/+4%

$185,000/-3%

Number of Sales

4.72 million/-11%

508/+12%

Inventory

1.55/-18.8%

1,439/-30%

Months’ Supply

4.0/-6.9%

3.6/-33%

Days on Market

24/-11%

84/0%


Want more numbers? Read up on Brad's market report here!

I’ve shared a few times in this post that all of us at Coldwell Banker Gosslee are here to help in the purchase or sale of your next home.

And don’t forget, if you have any questions, please ask any of our 150+ agents in Shreveport and Bossier City or reach out to me at jessica@cbgosslee.com

 

 

 

 

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