1. a point at which a function takes an infinite value, especially in space-time when matter is infinitely dense, as at the center of a black hole.
2. a hypothetical moment in time when artificial intelligence and other technologies have become so advanced that humanity undergoes a dramatic and irreversible change.
Honestly, I’m not sure what all that really means.
But when I look at the trends in our real estate market it does look like we are heading for something like what that first definition is describing (that second definition sort of freaks me out).
Below is a chart of homes For Sale vs Sold over the last 5 years in the Puget Sound area. Notice how the available inventory of homes for sale (light green) has been steadily decreasing while the number of homes being sold (dark green) is steadily, even if not quite as dramatically, been increasing.
Sure looks to me like we are rapidly approaching the time when there will be no gap between the two – that moment when the number of homes available for sale will be the same as the number of homes being sold – if you don’t call that singularity what do you call it?
Looking more closely at the data for the last 15 months you can see the speed at which we are heading that way.
Notice that from September 2014 to September 2015 the number of homes for sale decreased by about 45% while the number of sold homes increased by 6%.
This is, unsurprisingly, having a strong upward pressure on price. The $/sq ft. has increased about 8% year over year (not shown).
Here’s what’s interesting. Our team is on the phones for hours every day calling home owners to find homes for clients looking to buy and to find buyers for our clients who are selling. And every day, the number one reason we hear for people not wanting to sell their home is they can’t find another home to buy.
Well, if nobody sells it makes it that much harder (more expensive) for people to buy. The charts show this perfectly.
Sounds to me like a downward spiral not unlike the way a planet would get caught in the gravitational pull of a black hole – you knew I would bring it back to that, didn’t you?
Certainly for the immediate future expect demand to be strong and inventory to remain low.
What that means is that while in years past we have counseled our clients to wait until spring before listing their homes, this year, given the constant threat of the Fed raising interest rates and throwing the market into turmoil, we are recommending that anyone looking to sell do so while the market is still a powerful seller’s market.
Between now and the end of the year is not usually the best time to sell, but given these conditions, and the threat of market destabilization on the horizon, we are recommending striking while the iron is hot.
If you have questions about the market, your home’s value, or anything real estate related, please give me a call.