Median Sales Price
I use the median closed price for homes to show the growth in value that properties in our areas have experienced. Medians work best because they are not skewed by anomalies like averages are, and I used closed price rather than list price to provide market values, rather than what the seller might hope their home will sell for!
Real Estate is an appreciating asset so it is not surprising to see the values rise overtime, but these recent years of high demand have skewed appreciation up past what it has usually been in the past. Even with high interest rates turning away many buyers, the lack of inventory has kept demand growing, and thus, prices as well. In December, our median sales price was $261,800. That’s up $11,800 from last month, and $32,350 from a year ago. Home sweet home can be quite the investment!
Closed Price to Original Price Ratio
This graph is a great indicator of demand in our market. It shows us what percentage of the original asking price (before any reductions) houses are selling for. If a house sells for the exact asking price, it will have a ratio of 100.0%.
Last month, we had a 97% ratio, which is the same as it was in November. While 97% is still historically great, the past two months were actually the lowest since January 2020. Of course, over that time span, the record low interest rates were adding fuel to the fire. With higher interest rates and therefor less demand on the buyers side, it’s important for sellers to have realistic expectations when selecting a price for their home.
Median Days to Sell
Days to sell really means days to go under contract, aka days until the seller has accepted a written offer to purchase for the property. Like the last graph, this helps us measure supply vs demand. I am again using median rather than average so that the outliers don’t skew our numbers.
In the past, 30+ days on market was perfectly normal. Since demand picked up several years ago, we have been spoiled with record fast sales. They have slowed down ever so slightly, but houses are still moving pretty fast. In December, the median days to sell was 14, which is slowly creeping up. In October it was 13, in August it was 7, and in June it was 5. December is actually the longest it has taken houses to sell since May 2020, when the median days to sell was 16.
Number of New Listings
This graph represents the number of properties listed for sale over the past 3 years. This statistic helps us identify what the number of new inventory is, since supply levels directly affect demand and prices.
As you can see from the patterns in the graph, it is not uncommon for people to hold off on selling this time of the year. Even with that being said, however, last month was extra slow. We only had 230 new listings, which is the lowest it has been since December 2019. Many people who own are enjoying large cushions of equity and low interest rates. In times of economic uncertainty, it makes sense that many homeowners want to stick with their current home- and interest rate. Combined with the holidays, it isn’t a surprise that less people wanted to sell last month.
Number of Transactions
Here we see a visualization of the number of homes that made it through the listing process and ended up being sold to a buyer ready to call it home.
Just like the last graph, we can see some obvious seasonal trends here. Last month we sold 281 properties, almost 100 less than what we sold in December of 2021 (374 sales). On a national level, the National Association of REALTORS noted that we have been seeing transactions slow down for the past 10 months in a row- the longest streak of decline since the NAR started tracking the stat in the late 90’s.
Months of Inventory
This final graph tracks an equation that we use to measure the relationship between inventory and demand in the market. This statistic essentially says “If we get zero new listings for sale until every house currently listed has sold, at the current rate houses are selling, it would take x months before we run out of inventory.”
This one might be the most interesting graph in my opinion. The part that I find interesting is that despite there being less transactions, and prices being higher, we STILL have a very small months-worth of inventory. In December, we had 3 months of inventory, which is on par with what we have been seeing since mid 2020. The reason for the low number here, along with prices still remaining strong, is all because of the inventory available. As long as prices remain stubborn and inflation higher than what most homeowners currently have locked in, they are going to keep their homes off the market, and inventory will continue to be an issue.