Listings are important and we should pay attention to them. Why? Because they can help us understand the direction of property value. If listings are priced higher than the most recent sales, for example, the market is likely increasing. If they are priced lower, the market is probably declining or cooling off. If they are about the same, the market is likely more stable.
It’s been interesting to watch real estate unfold over the past couple of months in Sacramento. I’m beginning to see more graphs like the one above in Rosemont where listings are priced more consistently with the most recent sales. In many neighborhoods listings are still being marketed slightly higher than sales over the past quarter, but the gap between recent sales and current listings is definitely getting thinner as the market has been shifting lately. In light of an uptick in inventory, less cash sales and an increase in interest rates, this is understandable. Moreover, this year we may experience a bit more of a typical real estate season where the market cools off a bit as Summer fades away. This “cooling” didn’t happen last year at all since incredibly low rates drove competition just as investor cash (Blackstone and others) devoured the market from late Summer through the early Winter. Last year was definitely not “normal”. This year could be different. We shall see.
Any thoughts or stories to share?