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This Week In Real Estate – July 22, 2023

Central Oregon Real Estate - This Week In Real Estate

Prices Remain Elevated As The Inventory Shortage Continues.

Price is the interaction of supply and demand, and the ongoing inventory shortage continues to keep home prices elevated. ATTOM released its Q2 2023 U.S. Home Sales Report, this week in real estate, showing that profit margins – the percent difference between median purchase and resale prices – of single-family home and condo sales increased 47.7% in the second quarter, up from 43.9% in the first quarter. Gross profits also experienced an increase rising 17% on the typical single-family home and condo sale to $113,000. The National Association of Realtors released a statement on Thursday that the median existing-home sale price in June was the second-highest price of all time and just 0.9% from the record high in June 2022. Below are a few newsworthy events from the third week of July that influence our business:

Profits On Home Sales Rebound Across U.S. In Second Quarter Of 2023 As Housing Market Revives.

ATTOM released its second-quarter 2023 U.S. Home Sales Report on Thursday, which shows that profit margins on median-priced single-family home and condo sales in the United States increased to 47.7 percent in the second quarter. The improvement in typical profit margins, from 43.9 percent in the first quarter of 2023, came amid a rebound in the U.S. housing market that pushed the median nationwide home price up 10 percent quarterly to $350,000. Even as seller fortunes turned around in the second quarter, the typical investment return nationwide did remain below the recent high point of 53.2 percent, recorded a year earlier during the second quarter of 2022. “Just when it looked like the housing market was flattening out, prices spiked again, which pushed seller profits back up to nearly their highest level in the past decade,” said Rob Barber, CEO of ATTOM. “It’s way too early to predict another long-term price run-up, especially since buying a home is a financial stretch for so many households around the country. But the second-quarter numbers clearly show the market has more steam left in it, and sellers are reaping the benefits.” Gross profits also shot up from the first to the second quarter of 2023. They rose 17 percent on the typical single-family home and condo sale across the country, to $113,000. Prices and profits went back up in the second quarter during the start of the annual buying season, helped along by several forces. They included the nation’s limited supply of homes for sale, mortgage rates that stabilized at around 6.5 percent for a 30-year fixed-rate loan, investment market gains, and an easing of inflation. Homeowners who sold in the second quarter of 2023 owned their homes for an average of 5.76 years. That was up from a low point over the past decade of 5.59 years in the first quarter of 2023, but still down from 5.84 years in the second quarter of 2022. Full Story…

Single-Family Starts Decline In June But Permits Post Gain.

Single-family production fell back after four straight monthly gains as elevated construction costs and rising mortgage rates led to a reduction in home-building activity and affordability conditions worsened for home buyers. Overall housing in June decreased by 8% to a seasonally adjusted annual rate of 1.43 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The June reading of 1.43 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts decreased by 7% to a 935,000 seasonally adjusted annual rate. On a year-over-year basis, single-family housing starts are down 7.4% compared to June 2022. The multifamily sector, which includes for-rent apartment buildings and condos, decreased by 9.9% to an annualized 499,000 pace for 2+ unit construction in June. On a year-over-year basis, multifamily construction is down 9.4%. As an indicator of the economic impact of housing, there are now 688,000 single-family homes under construction. This is 17.0% lower than a year ago. There are currently 994,000 apartments under construction, the highest levels since May 1973, and is up 15.7% compared to a year ago (859,000). Total housing units now under construction (single-family and multifamily combined) are 0.3% lower than a year ago. While single-family starts are down 21.1% year-to-date, single-family completions are down just 2.3% compared to a year ago. Multifamily completions are up 25.8% compared to June 2022. Any additional housing supply is good news for inflation data because more inventory will help reduce shelter inflation, which is now a leading source of growth for the CPI. Single-family permits increased 2.2% to a 922,000-unit rate but are down 2.7% compared to a year ago. Multifamily permits decreased by 12.8% to an annualized 518,000 pace and is down 31.2% compared to June 2022. Full Story…

Existing-Home Sales Retreated 3.3% In June; Monthly Median Sales Price Reached Second-Highest Amount Ever.

Total existing-home sales receded 3.3% from May to a seasonally adjusted annual rate of 4.16 million in June. Total housing inventory registered at the end of June was 1.08 million units, identical to May but down 13.6% from one year ago (1.25 million). “There are simply not enough homes for sale,” said NAR Chief Economist Lawrence Yun. “The market can easily absorb a doubling of inventory.” The median existing-home price for all housing types in June was $410,200, the second-highest price of all time and down 0.9% from the record-high of $413,800 in June 2022. “Home sales fell but home prices have held firm in most parts of the country,” Yun said. “The national median home price in June was slightly less than the record high of nearly $414,000 in June of last year. Limited supply is still leading to multiple-offer situations, with one-third of homes getting sold above the list price in the latest month.” Properties typically remained on the market for 18 days in June, identical to May but up from 14 days in June 2022. Seventy-six percent of homes sold in June were on the market for less than a month. Full Story…

Originally compiled & posted by Jason Waugh on the Berkshire Hathaway HomeServices Northwest Real Estate company blog.

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Mitch Darby

I am a real estate broker, architect (both licensed in the State of Oregon), and life-long Oregonian. If you are looking to buy or sell, I can help! I have Northwest Knowledge and am proud to be associated with Berkshire Hathaway HomeServices - Real Estate's Forever Brand!

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