What Is Slower Than Molasses in December?
This last week, while talking to a fellow agent, she said, “Austin’s market is slower than molasses in December.” I asked her if she liked molasses. “No.”
“Have you ever been around molasses in December?” I added. “No.” We both started laughing. As the laughter subsided, I continued, “You’re right. This market is the slowest I’ve seen since I’ve moved to Austin.”
Last week, in my email (subscribe here). I concluded with a summary statement. “Now is the time to hurry up and wait.” It is now common to find a house 120 days on market before it sells – seems morelike molasses in December buried in the back of my freezer.
In contrast, I am ecstatic for two of my clients. Zach and Kristi accepted an offer after 18 days and closed in six weeks – this last Thursday. Dr. Bobby and Janice accepted an offer after three weeks and will close at the end of the month.
What is contributing to the glacial crawl? The climate of uncertainty. Currently there are two currents contributing to buyer hesitancy: economic statistics and consumer sentiment. The tendency is to silo each category as if they do not influence the other. Not true. The fluidity and flow between statistics and sentiment influences the climate of consumer confidence. I tend to think of them like temperature and humidity.
What are the current housing stats?
MarketWatch reported, “U.S. mortgage rated climbed this week, with the average 30-year, fixed mortgage rate reaching 7.12% and 15-year mortgages hitting an average of 6.39%.” Is this a temporary blimp or the beginning of a new higher trend?
Jacob Channel, Lending Tree senior economist and U.S. housing expert stated, “The longer-term trend that’s emerged over the last several months is that while rates are often fairly volatile week-to-week, they aren’t really showing any sustained increases.”
Meanwhile, Forbes forecast that the 30-year, fixed mortgage rate will fall to within the 5% to 6% range in later 2023. Mortgage Bankers Association (MBA) echoed the same conviction. “Long-term rates have already peaked. We expect 30—year mortgage rates will end 2023 at 5.2%
What is the current consumer sentiment?
Numerator’s most recent consumer checkup diagnosed the following (Updated May 18, 2023):
Question 1: “What do you think your primary concern will be over the next few months?”
38%Personal finances
19% Family, friends, and concern for relatives
15%World events
12%Work or school related
Question 2: “What is your current level of concern regarding the economy?”
Over 88% replied, “High Concern.”
Lastly, when provided an opportunity to voice their general concerns about the economy, polled consumers stated the following:
67% feel as though the country is in an economic recession right now.
62% say rising gas prices are impacting their ability to afford other things.
68% think the U.S. economy will worsen in the next few months.
78% think inflation will increase in the next few months.
At this moment, patience is more than a virtue, it is an essential attitude. Why? Because that immoveable frozen molasses will move when you’re not looking. It will have thawed. The immovable will move. And we will all look back and say, “Remember the spring of 2023 when we…”
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Ivy