05 Jun How’s the market?
By Michael Meltzer
Five or ten years ago, the beginning of June signaled that the spring market was drawing to a close and people should start preparing for the sluggish summer market – fewer listings, fewer sales and lower prices. Things were pretty predictable. A few years ago, the spring market started extending into June and carrying on until July. That was only one small indication that the market was about to become much less predictable in many different ways.
If this year has shown us anything at all, it’s that it’s impossible to predict what’s going to happen in the market. Things were off the charts hot in January, February and March, which isn’t normally expected, but then the market started to show some signs of slowing down in April and May, when it would usually be taking off.
I wouldn’t say the market is slow now, but it certainly didn’t feel like a typical May. March felt like a typical May and May felt more like the end of June as the market started to balance itself out. We may have seen the peak of our spring market back in March and the start of the summer market in May, or we may see another burst of activity in June or July. Things are impossible to predict at the moment which makes it hard to figure out what to do if you’re thinking of buying or selling. (If you find yourself trying to figure this out, I’d suggest you read this for some help.)
Has anything really happened to change the market? I don’t think so, other than buyers’ perceptions of what may or may not happen. When buyers start hearing that the market may slow down and prices might fall, it’s not surprising for many of them to step back and pause. There are still tons of buyers out there, but a bunch of them are sitting on the fence waiting to see if prices do fall. I can’t blame them. I might do the same thing myself. But there’s no concrete reason for prices to fall other than that some buyers aren’t as motivated.
Current market conditions are based on buyers’ perceptions (that prices might fall) and emotions (fear of paying too much). When market conditions are based on perceptions and emotions instead of facts and reality, things become impossible to predict because how can one determine at what point perception becomes reality? Remember though, there’s one fact that never changes: people will always need a place to live. Eventually the buyers will climb off the fence and start buying again and the market will pick up. The question is when?