Courtesy of Allen Stanfield at Rain Residential
For today's Monday Market update I wanted to take a look back over the first two weeks of January's market performance to see if we can find the impact of the continuing government shutdown and prediction of increase in interest rates.
For this, I take a look at the first two weeks of 2017, 18 and 2019 and the sales completed in the Ocean Springs School District. Historically January isn't one of the higher volume months but it sets the tone for the entire year. With a constant modification of where interest rates will be in 2019, and the government shutdown continuing I take a look to see if this has negatively impacted the market. Should we expect a lull during this period of continued government ineptitude?
Well, based on the stats, yes, yes we should.
In 2017, there were a of 11 sales, with a volume of $1,949,900 and average sales price of $177,226. In first two weeks of 2018 there were a total of 14 sales, with a volume of $2,423,750 for an average sales price of $173,125. The average was higher in 2017 over this time period mainly due to the highest individual sales price being 30% more than its 2018 counterpart.
In 2019, we currently only have 2 sales listed for this same time period. The volume is less than a tenth of a year ago at $243,000 and an average sales price of $121,500. Now these numbers could still increase as any closings late last week or today may not yet have been reported, but regardless, the numbers appear to be well behind those of the last few years.
In both 2017 and 2018 the first two weeks of January proved to be some of the slowest times of the year,with less than 50% of the average over a two week period for the year, so it's not a telltale sign, but they did correlate with one another. In 2017 the average number of transactions over a two week period was 26.8, and in 2018 it was 28.3.
So where is the good new in this? First of all, this is a very small bit of information I'm using to make predictions. Also, despite the fact there are only two closings, there are currently 70 homes listed as pending/pending contingent in the district. That substantial amount would represent more than 10% of the entire 2018 transactions, and far more in total volume of sales with nearly 40% off those under contract being new construction builds.
Second, if this trend is widespread in the national market, it could prove to inhibit any increase in interest rates, which could prove hugely beneficial to the market over the course of the year.
My prediction - government reaches a compromise, buyers anxieties are relieved. Interest rates and inflation are held in check by a slow start to 2019 (albeit artificially inflated due to government shutdown) and savings at the pump. Which leads us to and through an incredibly strong spring and summer for the market!