Single-family sales in April made a huge jump over last year, up 38% to 192 units. Sales are still down 10% compared to the prior ten years, but it’s hopeful to see a large rebound from last April’s dismal sales. Sales of existing and new construction homes exceed last year’s numbers. Sales in the City of Columbia were also up by 52% over last April to 128 sales. Existing sales in Columbia have been sluggish, but up 38% last month, while new construction was up 100%.
With a jump in sales comes price increases, but not as high as the past few months. The average price home in Boone County last month sold for $375,633, a 7% increase. The median was up only 5%, to $324,000. Columbia experienced the opposite, with a higher increase in the median price and lower average price compared to Boone County as a whole. The average price in Columbia was up 4% to $396,605 and the median was up 11% to $359,950.
The sale surge in April caused days on market to decline 8% last month to 36 days, which is still extremely low for this time of year. This is the first drop in days on market since June 2022.
Also, the number of months of home inventory dropped 25% to 1.55 months, the first decline since March 2022. All price ranges below $450K have inventory levels far below what they should be for this time of year, with homes priced between $200k and $299K having just barely over two weeks of inventory.
There is an interesting tidbit when it comes to the price range of sales. The price range of $150K to $199K and $450K to $499K declined last month, while every other price range exceeded last April’s sales. These two price ranges have struggled for a while. For the range of $150K to $199K, it’s become exceedingly difficult to find single-family properties under $200k in the past 5 years. The $450K price is another story that seems perplexing; if you have a listing in that price range, you might reconsider your pricing strategy.
Pending listings (homes under contract) were up 5% last month, which could be a leading indicator of another bump in sales for May.
Building permits were up 7% overall last month, with gains in Columbia and Ashland, while County permits were down 24%.
The market remains healthy. Buyers took advantage of mortgage rate declines in March, and the number of sales in April proves it. However, mortgage rates in April, especially the last three weeks rose to 7.5% for a 30Yr. FRM and stayed around that level for the rest of the month. Since the start of May, mortgage rates have dropped steadily to toward 7%. The bump in rates during April has singled a drop in sales for May, as closed properties in the first 20 days of May are down 12% so far.
The drop in mortgage rates isn’t a surprise. The Federal Reserve hasn’t lowered the Federal Funds rate that it lowers to banks, but it did announce last month that it is ending quantitative tightening (QT). QT is a means the Fed uses to reduce liquidity in financial markets by allowing bonds on its balance sheet to mature without buying additional bonds. Since the Fed’s announcement, mortgage rates have declined along with the 10-year Treasury.
SOURCE – COLUMBIA BOARD OF REALTORS CEO, BRIAN TOOHEY, MBA, RCE, EPRO
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