More inventory is starting to come onto the market, and here’s why.
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Is home inventory going up? In short, yes! I’ve seen a significant increase in the number of listed homes in Mount Pleasant and Isle of Palms. However, it’s a bit more complicated than that.
In January and February, we hit record-low inventory. A home would come on the market and sell within a day. We listed $2 million homes that would get 15 offers. There was nowhere to go but up from such low inventory.
On top of that, we had a lot of off-market luxury home sales. About 50% of our luxury homes were sold off the market, so some of those statistics are skewed. Homes were moving, but they might not have been on the multiple listing service.
What's causing this inventory rise? The economic outlook for the U.S. has taken a turn for the worse. It’s not all bad, but oil prices are rising, inflation is high, and interest rates are rising.
COVID lockdowns and restrictions are also ending across the country. We saw people come down here because they were so locked down in their home states, but that has gone away. However, we still see many people moving here and telecommuting to work. They can work from home, so they’re choosing to live in warmer climates or where there are lower tax rates.
"We are definitely at a tipping point."
The biggest issue is the war in Ukraine. I don’t want to sound alarmist, but we are getting feedback from sellers about it. People are worried that it might spill over into NATO, the U.S. may get dragged in, or China could take advantage of the situation. I’m not saying any of these things will happen, but sellers are worried about these possibilities, and it could cause them to delay their sales.
So, have we hit the top of the market? No one can really say, even myself, but it is a possibility. For many, this looks a lot like the post-Vietnam era, where we had sky-high inflation, high interest rates, and a stagnant economy.
One of the things to look out for is that many companies are buying oil without using the U.S. dollar. The international oil market has traditionally used dollars, but now Saudi Arabia is selling to China in the yuan, and India is buying from Russia in rupees. If the U.S. loses control of the oil market, it could hurt the dollar and our economy.
We’re definitely at a tipping point. We can’t tell what will happen yet, but that doubt is causing people to list their homes. If you have any questions or just want to talk about buying and selling, feel free to call or email me or one of my agents. If you have a topic suggestion for a future video, send that my way as well. I’d love to hear from you.