The housing market is in uncharted waters, and it’s throwing homebuyers for a loop. And the most recent top-down market analysis doesn’t offer much for locals. The latest wisdom:  it’s unlikely prices will continue falling?  

But there hasn’t been a local price drop since 2012. And current conditions are not pointing at one this year.  

The current year-to-date median price is 10.5% higher than it was last year. So far this year, there has been one minor month-over-month decline in March. It amounted to a $2,100 drop (0.9%) from February. 

The odds of some month-over-month price softening in the next five months is good. But whittling the median price back to last year’s annual level is another matter.  

Mortgage rates are at a 20-year high, qualifying for a loan is tougher, banks are backing off jumbo loans, and new purchases in every local county except Greene have dropped below the recommended affordability level. But it hasn’t pushed the local housing market into gridlock because the counterbalance of high demand and lack of inventory has and continues to trump other dynamics.  

The local housing market has suffered less than two months of inventory since December 2020 and prices have steadily increased. Enough inventory to balance the market would be the free-market way to throttle home price increases; however, getting to just the lowest balanced market condition level last month would have required at least  more  2,500 listings. That’s a tall order when the month began with 1,310 listings. 

Local new home construction is picking up, but still running only a little better than half of its peak performance level. And many homeowners with low locked-in mortgage rates are not willing to trade them in for higher monthly payments. Both factors have cooled housing activity, but not the local price upward arc.  

The current outlook from Fannie May is for a 4% year-over-year price increase. If the local market, which is outperforming the US market, met that outlook July’s median sales price would have to drop $14,500 by the end of the year. Locals should not get trapped by these top-down analyzes.