Are you curious about what’s actually happening this August in our local South Jersey Shore real estate market? In this video, I’m going to give you a quick rundown of what’s going on in the August 2022 market. We’ll look at past trends, interest rates, and inventory to give you a good idea of what’s currently going on.
The August Real Estate Market
The real estate market today is a little bit similar to last month, though we have seen things slow down. In fact, the number of transactions right now is far lower than last year. However, that doesn’t mean that it’s shifted to a buyer’s market. It’s still very much a seller’s market—just not an extreme seller’s market anymore.
At this point in August, we can say that this year is going to end with far fewer real estate transactions than last year or the year previous. Rather, it’s going to be much more similar to 2018/2019, prior to the pandemic.
Multiple Offers And Pricing
Although there are fewer real estate transactions, we’re still seeing multiple offers on a lot of properties. If the property is priced correctly, it will get a couple of offers usually within the first one to two weeks on the market. However, we are starting to see some sellers that have overpriced their property. This is causing the property to hang on the market longer.
We are no longer in the market where you can choose that pie in the sky, no man’s land price; it’s not going to work any longer. While it was working two years ago, today you have to price it in line with the rest of the market and where other similar properties are selling at. I caution everybody who’s selling their property to make sure you don’t overprice. It’s very important in today’s market to make sure you get the most amount of money.
We’re still seeing a lot of headlines in the news about interest rates going up. In fact, what we’re seeing is that rates this past week have actually gone down a little bit. I don’t know for sure yet, but we may have seen the peak in interest rates. We know the Feds want to temper inflation, and we may be seeing inflation peak. Therefore, rates may not be going any higher.
I had a buyer give me an interesting point about the rate recently. Last year, they were making offers on houses and had to go over asking price, put appraisal gaps, or make up cash difference if the house appraised low. They were competing with a bunch of different buyers, but they were getting a lower rate. Today, however, they have a slightly higher rate on their mortgage but are not going over asking price.
They’re also not competing with five different buyers, and they’re getting a normal mortgage contingency without having to make up a gap. And a lot of people recognize that, at this point, they’re just renting the current rate. Rates will probably go down again in the future, particularly if we have a cooling-off in the market or even a recession.
Recessions And Inventory
When it comes to recessions, you may have seen headlines that we’ve had two quarters of a downturn and that we’re in a recession. I’m not here to argue whether we are or are not in a recession; however, we have not seen any recession-like conditions in the real estate market.
Prices haven’t declined—although they have cooled off—and we’re still seeing a lot of competition. I think we’re going to see that through the rest of the year. You hear me talk about this all the time, but we still have low inventory levels. We still have about two to three months of inventory on the market, which is a seller’s market. To get into a neutral market, we have to have about five to six months of inventory.
Keep in mind that when we had a real estate crash in 2008, we had 10+ months of inventory on the market. We are far away from being anywhere close to a buyer’s market or a real estate crash. I’m not worried about that yet, and I don’t see that coming in this year.
Looking To The Future
I hope this gave you a good idea of what the August real estate market is doing here in the South Jersey Shore. If you have any questions, feel free to reach out to me and I’ll be happy to help.
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