The First Month of 2023 Stats Are In!

After 17 months of gains, home prices fell in the first month of 2023. The median price for single-family homes dipped below $1 million for the first time since August of 2021. In January, the median single-family home sold for $970K vs $1.05M the previous year. A similar trend was observed in condo sales, where median prices dropped 3% year over year. The median price for a condo last month was $495K vs $510K last year.

The increased cost of borrowing has sidelined many buyers; however, those still in the market will be pleasantly surprised with their ability to negotiate with sellers compared to the last few years of intense competition. Most homes still sold within a month within 5% of list price. Overall, we are seeing shift from a booming sellers market to a more balanced market.

Here’s what we are some of the major trends —

A Shift Away from Bidding Wars

The days of multiple offers bidding up the price of homes are behind us. Of course, there are always exceptions, but for the most part sellers are receiving offers at or below their asking price. Last January, the typical single-family home sold for 102% of list price — meaning sellers were getting 2% more than then asked for on their home. This year, sellers of single-family homes received 96% of list price — or roughly 4% below what they were asking for their home.

A similar trend was observed in condos sales, to a lesser extent. Condo sales went from receiving 100% of list price last year to 98% of list price this year.

Less Sellers are Selling, But Homes are on the Market Longer

The numbers last month have again demonstrated seller’s hesitation to put their homes on the market. New listings for single-family homes were down 16% compared to this time last year. However, the overall amount of active inventory rose as the time it took homes to sell doubled from last year (from 12 days on market to 24 days on market). Keep in mind that 24 days on market to sell is still very fast! However, the net impact of slowing sales has caused single-family inventory to increase by 77% year over year (from 311 homes on the market last year to 551 homes on the market this year).

Buyers Have More Selection

More inventory means more options for buyers! As the Fed continues to put upward pressure on interest rates, buyers in the market now are serious and ready to pay the higher costs of borrowing. Many clients that we work with know rates are up from their historic lows last year, but say they are eyeing a potential refinance in the future and/or recognize that current rates are still “not bad” compared to previous generations of homebuyers.

The market dynamics are shifting, your strategy should too. We can help you get there. Schedule some time with us.