The president of the Iowa Association of Realtors says the record-breaking housing market has slowed some down — but it’s far from coming to a complete stop.
Byron Menke of Treynor said the nearly 8% drop in home sales in May was a signal of a slowdown which he said was not unexpected. “Demand is still extremely high, a lot of buyers are still there, you know, inventory is still running short. And so that’s tempering this market a bit,” Menke says. Menke says that has helped make things a little more manageable.
“It’s slowed down. I mean, I’m not going to say it hasn’t slowed down. But it’s that I’ve told people that I think it would be pretty common to say that instead of going 100 miles an hour on the freeway, we’re getting closer to the speed limit again here,” according to Menke. The median sale price in May rose nearly 13%, showing the impact of high demand and low supply.
“You never want to see the market slow down and sell fewer homes for sale. But I think it was something that, you know, probably had to happen, it was the market that got so fast and furious,” Menke says, “and it was extremely difficult for a lot of buyers to likewise, you know, getting into the market, just because a lot of spot buyers came in and sucked things in. If they weren’t cash buyers, you know, the first-time buyer, that made it extremely difficult for them.
He says some buyers have kind of stayed on the sidelines for now. “Interest rates have doubled since the start of the year. And I know some people are watching, you know, what do we do now. You know, are we going in? he says. “I think you’re starting to see people going back to things that we haven’t heard of in a while, adjustable rate mortgages, that sort of thing.”
Menke says there are still people looking for homes and inventory is still tight – it will remain a very competitive market for those looking to buy. He says interest rates will continue to be a drag for some.
“It will, I think, continue to slow things down. It’s just every time interest rates rise that much and with the prospect of more interest rate increases to come,” he says. Menke says there are always people moving and he doesn’t see things slowing down completely right now.