Third Quarter 2024
The residential real estate world is collectively sitting on the edge of their couches, eagerly anticipating the Fed’s plan to continue to cut rates. Every new jobs and economic data report comes with a knee-jerk reaction to interest rates.
As it became clear in late summer that the Fed would make its first cut in over 3 years, interest rates came down before the cut even happened. In early September, rates hit an almost 18-month low only to gain slightly in the following weeks as strong economic reports came out. Those reports sewed some doubt into the probability of future cuts.
This pattern will likely repeat as we enter winter and the much-anticipated spring market of 2025. We sit, we wait, and we hope that interest rates continue to drop to increase affordability, invite more “locked-in” sellers into the market, and boost an inventory-starved real estate market.
Let’s pull up our collective ottoman and take a look at the data to see what’s happening in our local market.
Housing inventory has stayed at the historic lows we saw during and since the COVID years. It is typical to see inventory increase in the fall and winter, which is the case this year. However, the rolling 12-month average in Elmhurst still sits well below the 2-month mark. It’s largely believed that a “healthy” market sits between 4-6 months of inventory.
With inventory so low, the average sales price has continued to rise throughout the year. Elmhurst has seen a 12% increase in price over the past 12 months.
We are starting to see the traditional seasonal pattern of homes under contract and foot traffic(showings) slowing down. Both metrics should continue to stay low through the fall and early winter months. Although it is noteworthy that foot traffic jumped up in September when interest rates dropped. This supports the idea that consumers are reactionary to interest rate drops.
If you’ve been watching the real estate market to decide if the time is right to move, we can help. Our real estate experts can work with you as you explore and evaluate your options. Contact an LW Reedy agent today.
