A few reasons why it’s hard to time the market, and why you shouldn’t try.
The real estate market is hard to predict because it consists largely of lagging data. The only leading indicator we have to tell us what’s going to happen in the future is the contract activity for a given month. Think about it this way: A contract that is signed today won’t actually close for another 30 to 60 days. Home sales that are being reported today had contracts that were signed two months ago, which is a lot of time for the market to change. In just the last month, the average mortgage interest rate went from 3.9% to 5.15%.
What you hear on the news about Harrisonburg real estate may not necessarily be in line with what the data shows. The contract activity we had in March was the strongest month we’ve had in 10 years—over 187 contracts were signed in that time. As of this recording in April, we’ve already had 100 contracts signed.
However, we’re not quite on pace with the activity we saw last April when 151 contracts were signed. The major reason behind that is the reduced number of new listings. So far this month, we’ve only had 104 new listings.
“The market is hard to predict because real estate consists largely of lagging data. ”
Consumer confidence is also the lowest it’s ever been, and homebuilder sentiment is also vastly reduced. That could come into play in our summer market; the problem is we won’t know for sure for another 60 to 90 days, possibly even another quarter or two.
If you’ve been trying to time the market, remember that it’s simply not possible. Always look to your local real estate professionals who can provide you with the most up-to-date data that is tailored for your situation. That way, you can make the most informed decisions possible.
Don’t hesitate to reach out to me if you have any questions or need assistance. I’d love to speak with you.