After several months of declining pending listings (homes under contract), home sales in September tumbled 11% to 146 sales. This marks the fourth month in a row of declining home sales, and year-to-date sales have now turned negative by 1% for the year. Sales in the city limits of Columbia were down 9% comparatively and are down 3% for the year.
Prices still rose despite the decline, with the median price up 8% to $330,000 and the average price jumping 10% to $379,087. The median price in Columbia exploded by over $80k to $373,750, a 28% increase, while the average price increased by almost $74K to $408,316, a 22% increase in the year-over-year price. September is another month this year where prices are increasing because more buyers are purchasing in higher price ranges than last year. Sales for homes priced under $400k posted a 22% drop, while sales of homes priced above $400k increased 15%.
Days on market dropped 21%, with an average days on market at 23 days, down from 29 this time last year.
Home market supply did increase by 24% to 2.99 months of supply, the highest amount of market inventory since February 2020. This number was pushed up with a reduction in sales in the past few months and an increase in new listings for most of 2024. One particular segment of the market that has kept market inventory low is the existing homes on the market. However, the existing home inventory jumped to 2.49 months in September, a 38% increase.
The decline in showings last month narrowed compared to the past few months, only down 12%. Since March of this year, showings have been down on average by 416 showings per month and are down 13% for the year.
On a positive note for September, pending listings spiked last month, up 16% to 171 homes under contract, the highest level for the month of September since 2021. The jump in homes under contract could bring year-to-date sales back into positive territory in the coming months. The jump in pending listings is more than likely due to the drop in mortgage rates leading up to the Federal Reserve announcing a cut to the Federal Funds Rate in mid-September.
For the third quarter, single-family home sales were down 11%, while the average price was up 11%, and the median price was up 4%. Condo sales were also down slightly for the quarter, but sales are up 16% year-to-date after condo sales tumbled most of 2023. Prices for condos increased last quarter by 7% for a median price of $175,000 and an average price up 8% to $200,619.
Other cities in and around Boone County were similar to Columbia, with declining sales and increasing prices. As a result of overlapping market areas, this data is not as accurate in some areas, especially municipalities outside Boone County.
Building permits in the third quarter were up 11% and have increased 20% year-to-date. The increase in permits seems large. However, permits in 2023 for the first three quarters of the year were down substantially compared to 2022. Single-family building permits so far in 2024 are almost 2% higher than in 2022.
The hype of lower mortgage rates with the Federal Reserve lowering the Federal Funds rate was short-lived. Unfortunately, the Fed. lowering the Fed. Funds Rate was already priced into the 10-Yr. Treasury before the announcement, pushing yields down to around 3.16. 30-Yr Fixed Rate Mortgages conversely dropped to around 6.1%. Since the Feds announcement, the 10-Year Treasury and 30-Yr. FRM rose steadily for the second half of September and have increased much more since the start of October, where the 30-YR FRM was at 6.82 yesterday and will probably increase again this afternoon based on bond yields this morning.
The market remains stable despite the drop in sales as prices continue to rise. The election may have some buyers sitting on the sidelines, who are also disappointed about where current mortgage rates are. The Fed is still implying further rate cuts, which could bring lower mortgage rates, and we could see some pent-up home buyer demand hit the market after the election is resolved and buyers feel more stability going forward.
SOURCE – COLUMBIA BOARD OF REALTORS CEO, BRIAN TOOHEY, MBA, RCE, EPRO
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