FEWER HOMES ARE SELLING

 

The general real estate market is primarily interest rate sensitive (the exception being the luxury market, which is primarily stock market sensitive).  When interest rates rose to over 7% in September, demand declined in response.  Lowered demand causes supply to accumulate as sales decline.  The Cromford Report offers these specifics:

“Fewer homes are selling. Closings fell 9.8% to 5,155 over the past month compared with last year. September closings were 4.7% below September 2025, the second month in a row below last year after every month from January through July came in higher. New listings were down too, 9,287 over the past month against 9,618 a year earlier (-3.4%). Supply is building because fewer listings are selling, not because more are coming to market.”

The Cromford Report evaluates the overall health of the market with a gauge called the Cromford Market Index with 100 being a balanced market.  It notes the following:

“On October 21,⁠​‌​​​​​‌​​‌‌​​​‌​​‌‌​‌​‌​​‌‌​​​​​​‌‌​​‌​​​‌‌‌​​‌⁠ the Cromford® Market Index for the market as a whole (all areas and dwelling types) fell to 69.9. It has not been below 70 since March 12, 2009. Any reading below 90 means the market favors buyers, and 69.9 is signaling that buyers are seizing control. This has been⁠​‌​​​​​‌​​‌‌​​​‌​​‌‌​‌​‌​​‌‌​​​​​​‌‌​​‌​​​‌‌‌​​‌⁠ a steady slide, not a sudden drop. The index has fallen every day since September 10…It was last in the balanced zone on January 29, 2025.”

The bright spot for sellers is the prices so far are holding up fairly well even with the drop in demand.  The under $400,000 price point is seeing the largest retreat in pricing, down about 5% from last year.  The $400,000-$600,000 range is down about 2%.  The exception continues to be luxury which continues to see price increases – particularly the over 3 million category which rose on average a whopping 26.5% over last year.

The average seller who wants to sell must prioritize pricing. Even with decreased demand, 44.5% of homes that close went under contract in 13 days according to the Cromford Report.  Homes that reduced their price, once they hit the right price, went under contract in 16 days.  The message to sellers is indisputable – get pricing right.

 

Russell & Wendy Shaw

Mostly Wendy