The Brexit news this week is certainly a top story. The vote for the UK to leave the European Union is shaking up the markets and the interest rate have improved a bit, so definitely a good to time to think about refinancing if you haven’t done so already.
This week I wanted to share some thoughts about trend spotting. It’s important to pay attention to national and local market analysis, but even better to know is what is happening closer to home. We aren’t fortune tellers, but we can sometimes spot trends if we know what to look for.
Three indicators I like to watch:
Absorption Rate: Absorption tells you if there’s a buyer’s or seller’s market (below 3 is a seller’s market). If you track absorption over time, you’ll be able to quickly spot changes as they happen.
Phoenix Valley absorption is currently at 2.8 months of supply, compared with 3.8 two years ago.
Days on Market: Days on market (DOM) becomes longer when a market cools, and shorter when it heats up. It’s also seasonal – DOM is usually shortest in early to late spring when fewer homes are available and more buyers are looking. That’s why it’s important to compare this month’s numbers to year over year and historical averages.
Phoenix Valley DOM currently is 76 days for sold listings and 114 for available listings. Last year it was 82/115.
Average vs. Median sales price: It’s typical for the average to be higher than median; the gap between them and its change over time is what bears watching. When average moves closer to median it can indicate lower priced homes being sold, sometimes due to affordability issues. Movement in the opposite direction can mean housing is heating up and more expensive homes being sold.
Phoenix Valley’s current average is 120% of median, same as last year. That’s 3% lower than two years ago.
What statistics and trends are you watching? I’d love to hear from you.