Why haven’t high interest rates crashed the real estate market?

Dated: October 13 2023

Views: 50

We’ve had this conversation with both buyers & sellers this week so I thought anyone thinking about making a move would find this chart helpful in understanding what’s happening in our Bucks County Market today.
Bucks County Real Estate
The simple answer to the question is supply vs demand.
Although interest rates have shot up from an average of 3.1% in 2020 to over 7% today, it has not dampened buyer demand enough to offset the historically low inventory.
So, even though some buyers have been priced out of the market due to affordability, there are still more buyers looking for homes than there are homes available.
Since October of 2018 to today inventory in Council Rock, Pennsbury, Neshaminy, New Hope Solebury, and Central Bucks is down an astounding 70.76%.
A buyers, or sellers market is based on how many months inventory we have.
A buyers market is 6 months + of inventory, and under 6 months is a sellers market. In October of 2018 we had 3.2 months supply and today it has dropped to 1.3 months.
So, it is still a strong sellers market, and until inventory rises buyers will still be competing for a limited product.
Prices are not increasing at the same pace, but are continuing to rise.
It’s still common to be in multiple offer situations where buyers have to consider going over the asking price, waiving appraisal, waiving inspections, giving the seller the settlement date they want, etc.
Blog author image

Dale Cosack

My Mom, Kim, started in the real estate business in 1991, just a few years after she became a homeowner.She used the first Realtor she spoke to, saw a total of 3 homes and made an offer.She didn&rsquo....

Latest Blog Posts

Agent Advice Can Greatly Enhance Your Experience and Your Bottom Line...

Why You Want an Agent’s Advice for Your MoveNo matter how you slice it, buying or selling a home is a big decision. And when you’re going through any change in your

Read More

No Housing Crash in SIght

Why We Aren't Headed for a Housing CrashIf you’re holding out hope that the housing market is going to crash and bring home prices back down, here’s a look at what the data

Read More

Seller's Sweet Spot is all about the supply...

Why Today’s Housing Supply Is a Sweet Spot for SellersWondering if it still makes sense to sell your house right now? The short answer is, yes. And if you look at the current number

Read More

If You Want to Sell This Spring, You Need To Prepare Now...

It’s Time To Prepare Your House for a Spring ListingIf you're thinking of selling your house this spring, now is the perfect time to start getting it ready. With the market

Read More