30 Second Real Estate Market Summary
The word from agents and brokers on the street is that the market is slowing faster than is seasonably normal. However, I do not see it in the statistics for September. Here is how I see the market.
The stats below suggest the market is moving normally into a seasonal slowdown. I see no reason for alarm.
A constant question I keep getting is, “Are we in a bubble and is it near bursting?”.
Some professionals that I respect say “yes, we are in a bubble and it will burst in 6 months to 2 years”. There is certainly nothing in the stats to support this that I see. It is just something many are feeling based on their observations of the market.
My opinion is that in order for the bubble to burst, 3 things are needed:
1) Lots of folks feel these good times will never stop. So far in my small world, more folks feel we are in a bubble than not. This overall cautionary mood tends to assure it will not happen.
2) Investors are purchasing homes to-be-built and selling them before completion and pocketing $30-$40K profit without even signing a deed. I do not see this as yet and I do not think the home appreciation rate will support this yet. In 2005-06 when this was happening, homes values were appreciating at over 12% annually. We are currently at just under 10%. This last 30 days the average home value fell slightly by $1,300.
3) Stated-income loans become common-place. I just learned that this problematic product is now available. So this could fuel the market in the months ahead and cause a burst in the bubble as these loans become more widely used. Stated income loans allow loans with very limited documentation. (Some claim unqualified borrowers use these loans.)
Let’s keep our eyes out for these signs. If you have other signs of a bulging bubble that is ready to burst, I would love to hear from you.
Here are the Market Stats:
Closed sales slid over 7% from the month before. This is simply a seasonal shift.
Pending sales also fell over 7% from the prior month. Again, this is just a seasonal shift.
Inventory ratios remained steady with no change from last month. So despite falling sales, the number of properties for sale also fell such that there was no change in the inventory ratio.
FOOD HEALTH: A Thought on Eggs
It is no secret that the older a laid chicken egg, the less fresh the taste. At least this was the finding of Consumer Reports per their March 2014 study. A quote: “taste can diminish as eggs age”.
So naturally it is only logical when you are shopping, you will want the fresher eggs – the ones with the most distant date stamp. Unfortunately, finding the freshest eggs is more difficult than it sounds. There are no regulations that require consistency in the carton date stamps. One egg supplier may date stamp a “best use-by” date in 30 days and another in 90 days or more. There are simply no requirements for consistency. Date stamps on eggs mean little.
So how does one find eggs that are fresh?
Your local small farmer will, as a general rule, be the freshest. New Seasons and Chucks work hard to stock local eggs alongside the major egg suppliers. To be on a Fred Meyer shelf however, store policy requires that you be huge – able to stock all the FM stores. Fred Meyer advertises and promotes local… but they do not promote small. I am not sure about Safeway and Albertsons but I suspect they are about the same as I have not seen small local producer items on the shelves.
If you are super curious, the small farmer will usually provide you with a means for contact to answer just such questions. I have been told by a small nutrition-based market that their eggs are over two weeks old when they arrive on the shelf. I can tell you that Kelsey Family Farm eggs are between 1-7 days old when they arrive on the shelf of Chucks and New Seasons. This is the time of year that the small farm egg suppliers typically have shortages due to their chickens molting.
Wouldn’t it be great if a supplier posted the actual date an egg was laid?
This seems so intuitive and valuable that one has to ask, “why aren’t egg producers doing this?”. My guess is perhaps the same as yours…. It is not in their best interest because consumers would not be happy to learn how old market eggs actually are.
What a great idea-posting the actual date laid on egg cartons! Jonell Kelsey of Kelsey Family Farm is pondering this very thought now. She probably will not make any changes until chickens are through molting and production numbers improve.
Last issue I predicted that rural properties will see improving values over the next 15+ years as compared to in-town properties due to the inevitable popularity of the electric vehicle. If this interests you just let me know and I will send to you that past issue.
Chris Kelsey, GRI, MBA
Keller Williams Premier Partners