December Housing Market Update
The weather is getting cold... and so is the market? Well.. Not exactly.
Here is your December 2023 Market Update. Let's start with a summary for those (like me) that like to get to the point.
New Listings = Another 12% drop. 1,326 new listings last month.
Available Listings = Holding steady. Almost unchanged in November.
Pending Sales (Buyer Demand) = Still dropping off a cliff. Almost half of what sold last month.
Days on Market = Went down? 24 Days on market... down from 26.
Price = It happened. We've hit a new high for median price for November, $50k higher than last month.
Are you shocked? Buyer demand was cut in half again, and prices rose. Why is this happening?
There are two major reasons for this...
Reason #1 - Interest rates spiked and are recovering. Looking at a chart of interest rates, we sat at roughly 6% for almost a year. Then suddenly it shot up to 8.5%. This scared buyers into getting into the market before things got worse. It also put more people back on the fence.
Reason #2 - News headlines show that the FED has said that they are dropping rates 6+ times in 2024. This is giving a lot of buyers PTSD who tried buying a home in 2020 - 2021. Get into the market now before you're waiting in line at open houses again. That's the thought, at least.
Let's review each of the categories in more detail.
Lower listing heading into December is not surprising at all. * Remember that market update data is from the previous month. The holiday season is when sellers are least likely to put their homes on the market.
Last month, we saw 1,326 homes come to the market. Which isn't very far off the number of new listings we saw in November of last year. Also, these are about half of pre-pandemic numbers for new listings in November.
2018 = 2,391 new listings
2019 = 2,097 new listings
Expect to see this number even lower in the next housing market update that will show December numbers.
Nothing much to report here; the amount of available listings has not changed. Also, not surprising.
Pending Sales (buyer demand)
Another month of buyer demand getting cut in half. Last month's market update said that less homes sold than the month the world shut down. The month we weren't even allowed to show or sell homes (April 2020).
Well, this month, we've had almost exactly half as many homes go under contract as last month. This is half as many homes that went under contract while the world was shut down.
If I'm not making this clear, buyer demand is really low. I don't care what anyone is telling you. Fewer buyers are putting listings under contract.
Having said that, I can share with you that there is a tremendous amount of pent-up demand. The "fence" is full of buyers sitting and waiting. What they're waiting for is a bit unclear, but here is my 2 cents.
Buyers are praying for a market crash AND ready to jump into the market when rates come down.
** None of these numbers reflect the changes since the rate drops that I mentioned earlier.
Days on Market
Days on market actually went down. I think there are a few reasons for this...
People pull their listings during the holidays
Buyers are taking advantage of the market (buying before the new year)
Sellers on the market right now are motivated
This is down from 34 days on market for this same time last year. The market is hotter now than it was then. Even with the significantly lower buyer demand.
Having homes sold on average in 24 days on the market still puts us in a very strong seller's market. Most of our buyers writing offers right now are still competing with multiple offers.
Homes that "look good and are priced right" are selling. Listings that don't look great or are overpriced are sitting with little to no activity.
Pricing your listing correctly is crucial to getting the most out of your home. If you're wondering what that price would be for your home, click here to find out.
We follow a two step process. Once you share your info, we'll give you an estimated range of your home's value. The we take it a step further. Your Onyx Agent will reach out to do a custom market analysis on your home.
This will give you a real idea of what you could sell your home for and several options to increase that number. There is no cost or obligation here, we do this for all our clients annually.
What everyone is waiting to hear about. Well, I doubt it's what you were expecting to hear. Yes, prices have gone up. Again. A new highest level.
Let's break this down...
New listings are down + Available listings are the same + Pending Sales are WAY down + Days on Karket dropped a bit = Price Increase
How exactly does that make sense? It doesn't... and it does.
If you have a strong pulse on the market like we do, you feel the surge of home buyers (and sellers) who are itching to make a move. When (not if) rates come down, we are going to see a flood of homes and buyers to the market.
If you shopped in 2020 - 2021, you know what I'm talking about. Buyers are having the same concerns now as they did in the winter of 2020 and 2022. "What if the market crashes and prices go down?" is very likely to be less painful than "What if they don't?”
That's why prices will continue to stay roughly where they're at until we see a major change in rates (up or down).
If you're not already working with an Onyx Agent, you need to do yourself a favor and start the conversation. We talk to more people in the market than 99% of agents. We have a very close pulse on the market.
The areas you're looking at may be totally different, and an expert is required for this market. Even if you're in research mode (most people are), reach out and set up your Strategy Session. If you're 2 years away from making a move, we'll come up with a game plan with you.
If you're in the position where you need to (or think you do) sell your current home before you buy your next home, ask about our 'Buy Before You Sell' program.
You owe it to yourself to be prepared. Do it well in advance.
The market has changed, and so have our strategies.
Hope you've found this helpful! If you have, forward or share this with a friend.
PS - Check out the most recent price reductions in the market.