The Market Tea

Part One: What rates actually did

Monday through Wednesday the daily rate trackers were on a nice run. By Wednesday the 30 year quoted around 6.60 percent, the third straight session of easing. The driver was geopolitical rather than economic. Iran negotiations turned toward reopening the Strait of Hormuz, oil began moving more freely, and a softer inflation outlook pulled the bond market down with it.

Then Thursday morning Freddie Mac published its weekly survey and the 30 year printed at 6.69 percent, up from 6.66. Highest reading in about eleven months. The 15 year went the other way, easing to 6.01.

Both things were true at once. The daily indexes drifted down while the weekly survey drifted up, and by Friday the trackers were spread from 6.58 to 6.71 depending on whose index you read. Thirteen basis points of disagreement is unusually wide. Applications fell 2.9 percent for the week ending July 31, and the Fed does not meet again until September 15.

So here is my honest read. Stop quoting headlines. If you are an agent telling a buyer where rates are, or a buyer deciding when to lock, a national average is not your rate. Ask your lender what your actual file prices at today.

And size the movement honestly. On a $450,000 loan, the week over week move from 6.66 to 6.69 costs about nine dollars a month. Year over year, 6.63 to 6.69, is about eighteen dollars a month. Rates have sat inside a twenty dollar band for a full year while Montgomery County prices rose 4.2 percent. If someone is waiting for rates to rescue them, that math is the answer.

Part Two: The greater Philly picture

No July county release yet, so these are June figures. Montgomery County closed 979 sales, up 10.4 percent year over year, a $521,000 median, up 4.2 percent, and 1,244 active listings, up 17 percent, at six days on market. Chester County: 661 closed, a $627,000 median up 4.5 percent, 852 actives up 13.1 percent, also six days. Philadelphia stays the outlier at 1,347 closed, down 5 percent, and nineteen days on market.

That 17 percent jump in Montgomery County inventory is the number I keep circling. Sam Khater at Freddie Mac said the same thing this week, that for sale inventory is improving from the limited supply of recent years.

My own listing alerts backed it up, and the volume climbed every day. Wednesday brought ten new listings. Thursday brought twenty seven addresses. Friday brought thirty three, the busiest night since I started tracking.

Wednesday and Thursday belonged to the top of the market. Five of Thursday's twelve new listings came in at $800,000 or higher, including a $3,295,000 property on Stenton Avenue in Plymouth Meeting with just over 6,000 square feet. In a county with a $521,000 median, that is heavy.

The regional cuts spread wide: Ambler down $25,000, Norristown down $20,000, Lansdowne down $20,000, Bridgeport down $15,000, Blue Bell down $10,000. The pattern I keep coming back to is that four separate listings came on the market and took a cut in the same week they were listed. Sellers are testing a number, watching the first weekend, and correcting fast.

Part Three: Conshohocken, by the numbers

Six new listings hit the board in Conshy this week, $3,862,900 in fresh inventory: $350,000 at 350 W Elm, $549,900 at 535 Bullock, $625,000 at 367 W 7th, $750,000 at 1016 Trinity, $789,000 at 205 Ella, and $799,000 at 1109 Riverview. Four of the six landed Friday alone.

Here is the interesting part. All six priced between $219 and $289 per square foot, median $275. A remarkably tight band.

The cut list tells a different story. Conshy carried seven active reductions midweek, then contracted to five by Friday:

• 639 Old Elm Street, now $454,000, down $26,000 from $480,000, 5.4 percent across two cuts in two weeks
• 422 W 5th Avenue, now $565,000, down $34,000, 5.7 percent
• 405 W 11th Avenue, now $499,900, down $20,100, 3.9 percent
• 3 Righter Street, now $599,000, down $16,000, 2.6 percent
• 232 E 6th Avenue, now $712,500, down $7,400, 1.0 percent

That is $103,500 removed from the market, 3.53 percent off original asking, with a median cut list price of $565,000, still above the county median.

Compare the per square foot numbers and it sharpens. New listings came in at $219 to $289. The cut list runs $239 to $419, and the two priced highest, 405 W 11th at $398 and 232 E 6th at $419, are also the two that have cut the least. Those sellers sit furthest from what the market just showed us it will pay, and they have moved the least.

One last number, because it is the one that matters. The $26,000 in cuts at 639 Old Elm lowered the monthly principal and interest payment by about $134. The whole week of rate movement was worth about nine dollars a month on a similar loan.

Price is doing roughly fifteen times the work that rates are. That is the whole week in one sentence.