Real Estate Market Stats July 21, 2022

Mid-July The Best Beach Homes Market Update Report

Hi Everyone, I hope your July is shaping up well! Here is your Real Estate Market Update for July 2022 with a general overview of what is happening across North America, and then a particular focus on our local market, Long Beach, California. I’ll also be sharing some market stats from last month, June.

Opening Thoughts

I’m sure you have heard a little bit about the fact that the real estate market across North America has changed in the past 3 to 4 months. While many question if we are in a down market, it is really more of a normal market. Imagine a sugar high for the past 2 plus years during the pandemic, when prices soared 20-30% per year, and homes on the market lasted 4 days or less, and received 20 plus offers. That was the sugar high. The almost-free money (rock bottom interest rates), the allure of the home being not just the home but the office, the school, the vacation spot, the theater, and the restaurant…. We are coming out of that now and entering the Normal Market. Here are 7 ways our real estate market has Normalized:

  1. Properties are staying on the market for longer than a week. Sometimes on the market for a month or 2!
  2. Inventory nationally is growing. This is actually a good thing, because home buyers need choices. There isn’t just one home for every 50 buyers.
  3. There are fewer Pandemic panic home buyers. They have mostly already bought and moved, or changed their mind.
  4. Interest rates will continue to go up and down.
  5. Fewer showings per listing and fewer offers per listing. Sellers may have to consider offers for below asking price.
  6. Property condition matters. Because buyers have more choices, they will look for the property with better condition, not just buy anything because there’s nothing else to buy.
  7. Price matters.

Charts and numbers for city of Long Beach, California

Let’s look at some numbers to demonstrate what we are seeing.

Each of the metrics below is a clickable live link that you can click to get the entire graph which will give you a clear picture of the trends in our local market.

Number of Active Listings: Up compared to last month, and down slightly from last year: 438 active listings in June 2022, up from 388 in May 2022, down from a year ago June 2021 when it was 449. As you can see from the graph, though inventory is up from last couple of months, we are still below levels seen in 2018 when inventory was between 700 and 800.

 

Pending Sales: Down from last month, and sharply down from last year’s June. Pending sales June 2022 were 212, down from 251 in May 2022. Downward trend in Pending Sales observed since March of this year. Pending sales are down 39% compared to last June, when pending sales were 350.

Median Sales Price –Median sales price went up in June compared to May this year. Median sales price in Long Beach in June 2022 was $849,450, up from $753,000 in May 2022, and still up 14.8% from a year ago – $740,000 in June 2021. So prices are holding firm in Long Beach even in spite of reduced numbers of homes selling.

And we can see correspondingly, Average Days on Market for a Listing: While the national averages are going up in terms of length of time it takes to sell a listing, surprisingly, it is still very low in Long Beach, at 14 days in June, vs 14 days in May 2022, unchanged. 

Conclusions

National and across North America data show that the math has changed over the last 90 to 120 days – the interest rates have skyrocketed up, and the stock market has skyrocketed down. The shift has taken place. But as you can see from the charts for the city of Long Beach, in some individual local markets, the numbers can show that days on market still remain low on average, and prices remain firm, as inventory levels, while rising, are still not high enough to meet all demand.

Today, housing demand remains strong, as household formation continues to rise among Millenials and other generational groups. The “American dream” of home ownership is still very important to many people, and is a gateway to building one’s assets and future security.

As we trend toward a balanced market, which is generally described as 6 months of inventory on the market, we will see more choices for buyers, which is a good thing.

If you are contemplating buying or sell a piece of real estate in the near future, please reach out and let’s discuss your situation to bring about the best possible outcome for you and your family.

Nancy