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Your August 2016 Market Update

The end of August signals the end of the Summer Market, and the beginning of the Autumn Market. With a full six months behind us, we can examine where the market is, and where the real estate market is heading for the second half of the year.

The year started with 4,396 homes on the market, the second lowest start in the past decade. Since then, the active inventory has climbed without pause and today’s inventory is 6% higher than last year.
Demand has been hot this year, but is starting to fade with the Spring Market. With demand and active inventory slowing a bit due to holiday distractions, carefully pricing will be crucial in order to find success. The market is still really hot for homes below $750,000 and condominiums below $500,000, but every price range has been slowing and we should enter a balanced market during Autumn.

Interest rates are flat and do not look like they will be changing much for the remainder of the year. The Federal Reserve may have talked a big game back in December when they increased the short term rate for the first time in 9 years, calling for four additional hikes in 2016, but they had a quick change of heart due to stock market and international economic instability right after ringing in a New Year. The historically low interest rates are here to stay for the remainder of 2016.

Active inventory increased by 3%, 225 homes, in the past two weeks and now totals 7,329. The inventory looks like it will stretch all the way to 7,800 homes. Demand, the number of new pending sales over the prior month, dropped by 4%, 104 homes, and now totals 2,783 pending sales. Since peaking at the start of May, demand has dropped by 13%.

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