The end-of-year market saw a sharp improvement in the decline of contracts in December 2022 from November 2022, which fell by almost half. Remember that historically, December is a very slow month for contracts, thus these declines may be somewhat skewed in this small dataset.
If You’re a Buyer
You still have a lot of leverage. Inventory is at its highest mark since 2018 which means there is inventory to choose from. We’re sitting around 3.6 months of inventory currently, but demand will pick up in the coming months. Mortgage interest rates are high compared to the past several years, but high from a historical perspective over the past 30 years where the average is around 5.5%. Now and during all of 2023 is likely the best time for you to buy if it makes sense for you. We do expect the market to strengthen by the end of 2023 and into 2024.
If You’re a Seller
It’s early to predict what the spring will look like, but it will likely look much better than the end of 2022. We believe more buyers will jump back into the market or even come back after leaving, and we don’t expect a sharp rise in sellers. With very few exceptions, the spring market is the best time of the year for sellers. If you’re considering selling now, your decision should be “Do I sell this spring or in 2024?”. We see a more normalized market for the balance of 2023 similar to what it was like 3-5 years ago. Sellers shouldn’t expect buyers to give up concessions as they’re ready to negotiate deals again.
Prices are Dropping (But for How Long?)
December was the second month of price depreciation and the beginning of what we think will be a long Year Over Year depreciation trend. YOY Sold Price is very much a “rearview mirror” metric, meaning it is one of the last statistics to turn south or north with the overall market. In order to stay abreast of the market, we will now begin to monitor Month Over Month numbers. There is a reasonable likelihood that MOM numbers will appreciate in the spring while YOY numbers are still in decline.
- Inventory decreased to 3.6 Months of Inventory from 3.9 in November. The City of Austin saw inventory fall to 3.4 months of inventory.
- Avg Sold Price decreased -5.95% YOY to $563,805 in the metro area.
- Withdrawn/Expired listings increased +282% in the Metro and +255% in the city.
- The number of contracts dropped by -22% YOY, which is a sharp improvement from November 2022.
Historical Market Highlights: (courtesy of TNT, Texas National Title)
When you have questions about the market or your specific real estate scenario, feel free to contact me for a consultation. Here to Serve!
Oh, by the way…if you know of someone thinking of buying or [selling/refinancing] a home, who would appreciate the kind of service I offer, I would love to help them. Call me with their name and cell number and I will be happy to follow up and take excellent care of them.
Best to you,
Geof Sloan, REALTOR®