CHARTS: Signs of the Times
Published On: January 14, 2019 Posted by: Jeremy Peterson
The numbers are in for December as we finally close the book on an interesting 2018. Numbers for the last month of the year show that the market is beginning to move in a new direction for the first time in 7 years. But first, lets take a look at the big picture…
This is our long standing historical record for real estate transaction volume in Weber County over the past 22 years. The gray bars represent monthly sales. The red line represents the 12 month moving average. You can clearly see the bubble years as a sharp sloped pinnacle. After the Great Recession we see sales have climbed back to elevated levels in a sort of round mound pattern. A glance at the top left of the chart shows that the growth in sales appears to be stagnating. To get a better idea what is happening, let’s take a look at year over year growth for the past few years.
Here we see that 2018 was mixed in its results. After a surge in sales growth during the first four months of the year, growth turned the other direction with the last third of the year showing some significant months of sales declines. This is the first time since 2011 that we have seen YoY sales declines this large for September and December respectively.
This chart shows the days on market for homes being sold. While we are still in unprecedented territory when it comes to the speed of selling a home, December also marked a milestone in that it was the first December in seven years to have a longer market time than the year prior. While the increase was minimal, it is a significant divergence from the trend. However, we have to ask ourselves how reasonable it would have been for the trend to go much longer. If it lasted another two years, days on market would be a negative number! That’s just silly. So, we are glad nature is taking its course.
The bottom line is that the market has reached some natural barriers beyond which it cannot pass. Since real estate markets are cyclical, we should not be surprised to see the market pendulum begin its slow progression in the direction of longer sales times and fewer sales. While prices probably won’t be affected much this year, in coming years we may start to see them change as well.
If you are wondering how all this affects you and your real estate goals, CONTACT ME, and let’s sit down and find out whether buying or selling is the best option for you right now.