February Housing Market Update
Here is the summary of what we're seeing happen in the market right now...
New Listings = 1,754 new listings! Just as scheduled, we saw a large amount of new listings come to the market in January. We will expect to see this number increase through about March. This is almost the exact amount of listings we saw come to the market this time last year.
Available Listings = There are almost a thousand less listings than there were this time last year. To be exact, we're 23% lower than last year at this same time. For those expecting to see a flood of homes to the market, it doesn't seem to be happening.
Pending Sales (Buyer Demand) = We're still waiting on the real numbers here, but it doesn't look like it's going to be a huge number. Now, there are numbers and what we're actually seeing. Read the full post to hear about that.
Days on Market = 17 days on market is up from 14 last month. Even though this is already a very low number, I expect this to go down next month.
Price = The median price in January went down to $1,050,000. Remember, these are the deals that closed in January, meaning they likely went into escrow in December. Those buyers took advantage of the market. This will definitely increase next month. I'm also curious to see how much it increases.
Interest Rate = 6.98% is the rate (as of today, this moves constantly) for a 30-year fixed rate. I will always be pulling this from MortgageNewsDaily.com.
Alright, that is the summary. Let's talk about the deep dive into what is actually happening.
Before we get into the deep dive, I want to share some resources that our clients continue to find helpful.
Rent vs. Own Guide - Click Here
Mortgage Calculator - Click Here
Home Value Tracker - Click Here
Now for the deep dive...
This might sound good; more listings... Yet we're still almost HALF the number of new listings of a normal start to the year. If this is telling us anything, it's to expect another year of low inventory.
This is something that we should all get used to. I don't see things changing anytime soon. If you've been staying up to date with these market updates, this shouldn't be a surprise at all.
Here is the story everyone is telling... Sellers are all staying put because they have a 2% interest rate.
True for some, but definitely not for all. People don't move because of interest rates. Frankly, interest rates don't matter very much at all. It's all about the payment for 99% of people. People move because of life. They need a bigger home, a smaller home, a home without stairs, a single family instead of a condo.... the reasons go on and on.
We will continue to see more inventory come to the market, but it won't be a flood.
Everyone talking about a market crash needs to take a hard look at this number. Without inventory, there will be no price drop, let alone a market crash.
Available listings tells us how many Active Listings are on the market at any given time.
To put things into perspective, we currently have 2,700 active listings.
In 2019, at the same time of the year, there were 7,400 active listings.
There are far less than HALF of the normal amount of active listings. Normal meaning in a neutral market, which is exactly what we were experiencing in 2019.
We will see this number slowly climb, but it is going to take time for buyers to have the luxury of taking a lot of time to make decisions. There are still a lot of New Listings coming to the market as we just talked about. They are not sitting on the market very long.
This is where looking at numbers is one thing... Being in the market talking to hundreds of buyers and sellers gives us a different picture. Our website traffic doubled in January, and our agents are talking to a ton of people who would like to make a move.
Most listings are seeing multiple offers. Yes, I'll say that again. Most listings, especially the ones that "look good and are priced right" are getting multiple offers.
We wrote an offer on a property in Irvine that had 50 offers on it. No, that is not the normal, but it shows that buyers in this market are serious.
But I will say we are not seeing buyers write crazy prices and terms like we did in 2021. At least not yet.
Days on Market
This increased, but if I was a betting man (which I'm not), I'd be confident saying that this will go down next month. We've seen this environment before, and it is a fast market. Buyers and Agents are prepared for this type of market now.
Which means if you (or your agent) are not prepared for this market, you're going to be in for a hard time.
If you're considering buying this year and are not ready to talk to an agent, that is no problem. I highly recommend you take the time to watch this recording of a webinar I did for buyers in this market.
Here is the link to the Home Buyer Webinar - Click Here
Deals that close in January should be lower. Buyers that are willing to buy in December always get better deals—part of the benefit of taking advantage of the market.
With the activity we're seeing, we will see this tick back up next month.
For a guess on what is going to happen this year - I think we're going to see slow and steady prices for 2024. I don't expect to see prices spike, but I do expect them to be higher by this time next year.
I also don't think it'll have anything to do with interest rates. We've been well over 6% for a long time now, and prices continue to go up. When rates come back down to the 5-6% range, we will see more buyers come to the market.
Deep dive done!
I'm curious... what are your thoughts? Reply and let me know what you think is going to happen in the real estate market this year.
Seriously, if you're even thinking about buying a home this year and you're not already connected with an Onyx Agent, watch this recording.