Ride the Wave: Decoding the 2023 Housing Market Trends
It’s time to surf through another wave of housing market updates! Grab your virtual surfboard and let's ride the current of real estate data that 2023 has to offer.
Ocean of Housing Data Reveals Currents of Change
As we navigate the ever-changing tides of the housing market, a few things become clear.
Home inventory is generally increasing: +21.5% YoY
Sellers are dipping their toes in the water (-22.7%)
Homes are basking a little longer in the market sun before making the journey to a new owner: +14 days
Surf's Up: A Rising Tide of Available Homes
The ocean of available homes saw a remarkable surge in May 2023, with an increase of 21.5% compared to last year. This swell translates to 103,000 more homes bobbing on the surface of the market, ready for eager buyers to make their move.
Despite this increase, we witnessed a contraction in the total number of unsold homes, including those under contract. This figure dipped a tiny 0.2% compared to last year, the first decline we've seen since June 2022.
The subtle drop in total listings coincided with a reduced number of sellers. May saw a 22.7% decrease in newly listed homes compared to last year. Sellers, it seems, are a little shy to dive into the market just yet.
Anchoring Prices: A Pause in Price Growth
The waves of price growth seemed to take a breather this May, with a modest 0.9% annual increase. This is slower than April's price growth rate, indicating that the tide of rapid price growth may finally be ebbing.
While the median asking price is growing with the seasons, the median listing price may not reach last year's peak. This marks the first potential dip in peak prices in our data history, offering a potential respite for home buyers. However, don’t throw away your lifejackets yet, potential buyers! Despite the plateau in listing prices and declining sale prices, monthly mortgage payments remain higher due to elevated mortgage rates. Rate buydowns are one of the hottest options for home shoppers today.
Paddling Hard: Homes Spending More Time on the Market
Homes spent a bit longer catching the rays on the market this May. The typical home lounged around for 43 days before catching the wave to a new owner. That's two weeks longer than last year, but still a faster ride than pre-pandemic times.
If we paddle over to the 50 largest metropolitan areas, homes are waiting an average of 37 days, with southern metros experiencing the most significant increase in market time.
Smooth Sailing or Rough Waters: Regional Market Trends
Looking at the U.S. map, the housing market is a patchwork of calm seas and rough currents. The Southern region saw the most growth in the number of homes for sale, with a whopping 54.4% increase compared to last May. However, their inventory remains 40.9% below pre-pandemic levels.
The Midwest saw a modest growth of only 1.5% in inventory year-over-year. On the other hand, the West and Northeast saw declining annual growth in active inventory.
In a unique twist, three southern metros – Nashville, Austin, and San Antonio – charted significant inventory growth compared to last year, although most still trail behind pre-pandemic levels.
Reading the Market Waves: Concluding Thoughts
Price growth, once a mighty wave, seems to be smoothing out, offering potential relief to buyers. But they’ll need to navigate the undercurrents of elevated mortgage rates. Think rate buydowns and seller concessions to help!
So, whether you're a buyer paddling out into these waters or a seller trying to catch the perfect wave, remember: the real estate market, much like the ocean, is always changing. It's about finding the right wave and knowing when to ride it. So keep your eyes on the horizon, because the next big wave is always just around the corner.
Have questions about your home shopping options? Let's talk shop and ride the wave. Surfs up!