September 2023: Labor Day Insight From Phil

I love everything about summertime, but it’s very refreshing to get started on a new, colorful season. I was able to get out a couple of times over the weekend to get some indoor dining in.

My wife and I visited Mallebar, A Modern French Brasserie, and it was easily the highlight of the weekend. Located in beautiful Plymouth Massachusetts, this is the third restaurant of Chefs Jim and Heather Casey. They wanted to offer Plymouth a fine dining option and they decided to renovate and restore a former coffee shop into a chic and comfortable dining room. The goal of these two chefs is to present food that is a feast for your eyes as well as your palate. To start things off, my wife got the beet salad, and she gave it rave reviews. It’s not something that I would personally order because I’m more into that unhealthy stuff, but I took a couple of bites, and it really took me by surprise! I went with French onion soup as an appetizer and it was really good, so good that I gave this an 8 out of 10 on the FoodiePhil scale. For the main course, I had to go with the Scallops over mixed veggies. This meal just hit right; the scallop was opaque throughout; they were firm to the touch but still slightly soft. Sometimes when I order scallops, they come out tough and chewy and it’s very easy for this to happen as it only takes about 1 minute to overcook scallops to ruin the entire meal. Luckily, Mallebar clearly knows what they’re doing and presented a visually pleasing and excellent tasting meal. On the FoodiePhil scale, the scallops get an 8.9 and Mallebar overall gets an 8.6. I highly recommend taking a trip to Plymouth and checking out Mallebar, you will not regret it!

Where should I go next?! Send me your recommendations!

1. Homes listed for sale still garner great interest
2. Not enough supply to match demand
3. Looking into the future

1. Homes listed for sale still garner great interest

Don’t get me wrong, even though July home sales dipped in July doesn’t mean that homes aren’t still sought after. We have noticed that one single property that was typically getting double-digit offers has since cooled down, but the number of buyers and interest in purchasing a home are still there. Buyers are still bypassing appraisals and inspection contingencies because they want to accelerate the homebuying process. The Pending Home Sales Index (PHSI) noted that home sales based on contract signings declined 1.8% in July. In our opinion, take the decline of home sales in July with a grain of salt, they’ll be back up!

2. Not enough supply to match demand

We have talked about this in previous newsletters, and even with a slight decline of home sales in July, there is just still not enough supply to match the demand of the current market. New home sales have reached their highest levels since 2006 and the housing supply is at its lowest level since the 1970s. If you mix the two together, it’s not the perfect cocktail. It is great to be on the selling side of this market because sellers know it will not take much to get their home sold; however, with the supply not being there, it can still be a frustrating time for prospective buyers. Additionally, homebuilding has slowed due to a lack of construction works and a shortage of available plots to build on. Another big factor here is land costs are continuing to rise and the difficulty to find workers will limit the pace of annual homebuilding to around 1.5 million in the coming years, according to Goldman Sachs. Even with these obstacles that are coming into play, the supply will get better, and it will not be considered a “sellers’ market” for too much longer.

3. Looking into the future

With homes continuing to fly off the market, we really don’t anticipate a decline in home sales month after month. July could have been considered a “calmer market” but the way buyers are purchasing and waiving appraisals to accelerate the home buying process shows that there is a big demand for prospective homebuyers and they’re doing what they can to lock down the home. With new buyers continuing to enter the market and not enough homes for sale to meet demand, home sales and home prices are still going up. We anticipate a slight increase in mortgage rates by mid-fall as well as a slight increase in housing inventory towards the end of 2021. Many realtors feel that that the market will soften slightly until the winter months; however, big cities like NYC, Boston, LA, and San Francisco could see a major bounce back as a significant amount of people are returning to the cities to take advantage of the discounts which are not typical in big cities. With interest rates still low and the big cities making a comeback after being put on pause from COVID, we feel that the housing market is going to take off even more in the next 12 months.

With the demand being so high, we feel that the housing market will continue to thrive. Between the number of buyers who are coming into play, interest rates staying low, big cities making a big comeback, and inventory getting better, this is the perfect storm for sellers and buyers. For current homeowners, now is the time to take advantage of low rates. For prospective buyers, now is the time to get into the game, to not only get a feel of what the market is like, but to also see what types of homes are on the market that are within your budget.

Got a question? Contact me today to chat with a financial advisor or discuss your next steps.