The holiday season has arrived and winter seems to be quickly approaching, let’s take a look back at what October brought to the real estate market.
Existing home sales declined nationwide for the eighth consecutive month, falling 1.5% as of last measure, according to the National Association of REALTORS® (NAR), with sales down nearly 24% from the same period last year. Pending home sales also declined, dropping 10.9% month-to-month, exceeding economists’ expectations. Stubbornly high inflation and soaring borrowing costs have eroded buyer purchasing power and have caused the market to cool rapidly this year.
Local Monthly Stats-
New Listings were down 18.3 percent to 89. Pending Sales decreased 9.1 percent to 80. Inventory shrank 17.0 percent to 156 units. Prices moved higher as the Median Sales Price was up 2.4 percent to $255,000. Days on Market increased 100.0 percent to 28 days. Months Supply of Inventory was down 5.9 percent to 1.6 months.
Local Q3 Stats – Shifting Winds
The market remained strong for much of the year, but we are beginning to experience the marketplace shifting, and the numbers are beginning to bear that. Statistics through 3rd Quarter (September) reflect contracts that were largely written through July, so the stats show continued price growth, declines in DOM, and strong List to Sell ratios. However, when you look at more recent data from October through Mid-Novemer, a different story emerges.
Market Shift From 3rd Quarter to today is Beginning to Show in Most Areas As Sales Prices and List to Sell Ratios Both Drop and Days on Market are Poised to Grow.
What does this mean?
On the surface, it appears pretty bleak, but I’m struck by the fact that inventory is still so low and locally, buyers are still wanting to buy! Indeed, sales prices here have dropped 5% since the end of 3rd Quarter. However, the end of 3rd quarter was 11% over the same time last year. So, in fact, we are still UP 5.6% from Q3 a year ago and a full 10% for the same first six weeks of Q4 (10/1-11/18) versus last year. Personally, I am still writing offers where my buyer is competing with multiple offers. As a Seller’s Agent, up until just this month, all my listings were selling in the first 2 weeks with multiple offers for over asking price. I have one listing that I put on 3 weeks ago that did not sell quickly and is still active, this is the first in 2 years!
This doesn’t mean that I don’t agree that we’ll potentially see some decline in average sales prices in 2023. It only makes sense that we will. But I remain optimistic that it will be modest, if not minimal, given that we have so little inventory and a transient population with many folks that will need (or want) to sell and others who will need (or want) to buy. I do expect to see a return to ARMs as a tool for locking in discounted rates. The 15 year ARM seems particularly interesting; 5.25 with no closing costs at CFCU!
I hope these recaps help you to make decisions. I am always available to discuss and guide.