I am not sure where time goes, though here we find ourselves near the tail end of the year.
This has been one interesting year, lets be honest the 2020s so far have been super interesting to say the least.
The Real Estate Market here in Charleston has been fun to watch as well. We are selling less homes year over year, though it is not because of buyers demand is dwindling. What we are witnessing are buyers sitting on sidelines expecting 2 things to happen, Prices drop(which they are not) and interest rates to come down(which they will over time). Another reason we are seeing less sales this year is our inventory is still at historic lows, we are averaging roughly 1.8-2 months of Inventory.
What concerns me? Well I understand the rates are higher and the cost of a home is more then ever, though what happens when rates decline over the next 12-18 months? What effect do you think that it will have on our inventory? What do you think it will do to pricing? I think we can possibly see a reverse crash where prices go up, inventory shrinks yet again and buyers find themselves giving up their "rights" on a contract to win a deal.
So, what do you do? Well, lets get to the update and I will share some more thoughts at the end!
To the Update!
The average sales price in October was $621k which was Up from last October by 10.7%. If pricing has not dropped since the rate increase of 2022, what makes you think it is going to go down anytime soon? The FEDs are pausing their rate raise, with the Jobs report that came out this month it seems that rates took a rebound down once it was released. We will see prices continue to go up as long as inventory is low and it will remain that way in my opinion.
Average Days on Market:
Our Average Days on Market for a home are at 33 days, which is up 26.9% from October last year. Our days on market are slowing going up, though again, prior to 2020 the average home took nearly 60-70 days to sell, so we are well below the "old" norm. I expect to see this go up a bit due to seasonality and as we approach Spring it will trend the opposite direction, it always does!
Average Months of Inventory:
We are now sitting on 2.1 months of inventory, which is a 0% change from last October. So nothing has changed year over year with inventory. Last October we saw rates hit the 7%....this October we saw rates hit 8%! Inventory did not increase, the reason is most homeowners are sitting on a low rate, lots of equity, though no pressure to get out...thats gonna be the story for some time.
New Listings on the Market:
In October, we saw 1,836 new listings hit the market which was Up .3% from last October. Historically we see a bump in listings in October compared to the month of September. The reason is everyone is back into their new rhythm and are able to put their homes on market. This number also looks like a big push, though if you go back to 2019 in October we had 2,093 homes go to market. So much lower then "normal" times.
Homes Under Contract:
October saw 1,459 homes that went pending which was Up a stunning 20.9% from this time last year. If you remember, last October had a shock to the interest rate market, which caused a draw back from potential buyers at that time. Flash forward we also had a month of high rates(8%) though I think people are seeing the writing on the wall. Get the home you can afford now, when rates come down over time you can refinance though if you do not, you may be paying more for the home for the same cost... just with a lower rate.
Closed Homes:
In October, we saw 1,291 homes go to the closing table which was down 7.3% since last year. This is the theme for 2023. Less home sales. Locally and Nationally. We are going to see nationally the lowest amount of homes sold since roughly 2010-2011 time frame. Though the reasons are totally opposite! We have no inventory though back then we had 12-16 Months of inventory! We are just seeing less sellers raise their hand to sell at moment....its because they are locked in with such a low payment.
So, what does this all mean?!
Well truth is I do not have a crystal ball....wish I did trust me!
Though, with the way this year has gone with rates remaining "high" from where they were, price has not taken a hit as many of the major News Outlets and talking heads have suggested. In fact they did the exact opposite. We saw a small window where pricing "dipped" though from Spring on they rebounded and are climbing. They will continue to climb as well, hopefully at a more normal rate of 4-5% though the wild card will be if rates go down and go down a a quick rate we will see a flood of on the fence buyers, overwhelming a low inventory market...which could bring us back to the Spring of 2022.
Spring of 2022 was insane, buyers were giving everything they could just to win a contract as they were competing with anywhere from 5-10+ contracts on one home...I know I lived it on both sides! It was great working with a seller and hell working with buyers!
We do not want to see that repeat and I am sure the FEDs do not as well, so they will do all they can to stabilize their rates to help slow the drop in Mortgage rates. Though, after last weeks Job report rates took a big drop down.
If you have questions, questions about selling your home I am happy to discuss your options and talk planning and strategy with you!
If you are thinking of buying and are just concerned about your potential investment in the home, let's talk through it all. We can go over data to help you make an informed decision one way or the other!
Until then!
Onward
