We are now solidly in what is most likely the final stage of this real estate market shift—a dramatic increase in inventory and eventual price declines. This final chapter, which will need to play out in most areas of the country eventually, is well underway in markets that saw the steepest increases during the pandemic.
Below is a visual of inventory shifts between May 2019 and May 2024. Note the significant increase in inventory across the South:
No surprise, prices follow. The following markets have experienced the most significant declines since their 2022 price peaks:
Austin: -18.7%
New Orleans: -13.7%
Boise: -10.4%
Punta Gorda: -8.0%
Phoenix: -7.3%
(Source: https://resiclubanalytics.com/)
In contrast, the Northeast remains resilient, with many markets still up 10% from 2022. For now.
In every market shift, the cycle must fully play out, ending with a rebalancing of supply, demand, and price. I predict we have at least 12, maybe 24 more months to go for this last chapter’s dynamics to work through the country.
What can you do?
Stay on top of your local economic data. Real estate is a local sport, so while national stats are helpful, it’s the local stats that matter the most.
Stay on top of your business planning. 2024 is baked; what are you doing now to impact 2025?
Stay on top of your energy needs. Remember, this is a marathon. I’m actually writing this from Roatan, Honduras, here for a long weekend recharge.
Stay on top of key relationships. Burnout is real. Are you truly in touch with the key people in your life?
Stay on top of your finances. Use this summer to address what needs attention. If we can help you with that at Alchemy, we would be honored to do so. (Book a discovery call, or get a second opinion on your tax return here.)
This is nothing to be afraid of. On the contrary, be excited about the opportunities this is generating for you.
You got this! Stay on top of it.
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