LOCAL AND NATIONAL MARKET TRENDS

Bottoming out

Existing home sales for January 2023 fell (a very modest) 0.7% MoM to an annualized pace of 4,000,000 units. That was the 12th straight month of decline. But look at the chart: it’s bottoming. Existing home sales were actually UP in the South and West. And with spring approaching, and demand picking up, activity levels should get better from here.

Sellers and buyers calm down

According to the monthly Realtors Confidence Index, only 16% of homes sold above their list price in January, down from 61% (!!!) in April 2022. This reflects both: 1) more realistic initial listing prices, and 2) less buyer competition. Meanwhile, days on market (how long it takes a new listing to sell on average) is now 33 days. The last time DOM was 33 was February 2020 – just before COVID hit.

UNlucky number 7

In just three weeks, average 30-yr mortgage rates have shot up from just below 6% to very near 7%. Why? It’s been a combination of things (stronger than expected economic data, hawkish Fed commentary etc.) – all of which have the market worried that the Fed will lift rates higher, and keep them there longer. That said, inflation is clearly trending down and recession flags keep flapping. What does that mean? Lower rates are on the horizon.

Local Market Trends As of Friday, February 24, 2023

Coupled with a low inventory, we are seeing an increased days-on-market. Much of this can be attributed to the time of the year, but the volatility of interest rates over the last couple of weeks is a major player. Sticking with my prediction that we should see significant relief by May 10.