Peninsula Real Estate Market Overview
Happy Spring! Now that we’ve officially closed out Q1, it’s a good time to take a look at the numbers and get a sense of how things might look going forward.
Let’s take a look at some of the highlights:
No. New Listings
In Q1 last year, we had 225 new listings on the market. This year we only saw 130 new listings. With about 40% less inventory compared to last year, there just haven’t been as many options for buyers. This is why we’re seeing multiple offers on some homes and overbidding, despite higher interest rates and layoff concerns.
No. of Sales
There were 185 in Q1 last year and 93 this year, so about 50% fewer sales. With 40% fewer new listings, higher interest rates, and economic news, that’s to be expected.
Average Days on Market
Average days on market increased from 13 to 27. So on average, it’s not taking two weeks for a home to sell anymore. It’s taking closer to 4 weeks.
Average Sale Price/Sq. Ft.
The average dollar per square foot price is about 10% less this year compared to last year.
Average List & Sale Prices
- The average sale price dropped about 14%, from $2,173,489 to $1,875,737.
- The average list price increased by about 2.5%, from $1,907,240 to $1,959,790. This one might seem peculiar as sale prices are down by 14% on average. Likely, this is because sellers could see underpricing as a risky strategy and more homes are being priced closer to where they’re expected to sell.
- Another interesting thing to note is that the sale price to list price ratio is about 96%, whereas it was 114% at the same time last year. This paints a pretty good picture of what’s happened to demand in this first quarter.
Notes for Sellers
If you’re putting your property on the market now, it’s possible it may sell for less than it would have last year and perhaps lower than in previous years. With the current market conditions, how your home shows can make all the difference. Homes that are prepared well for sale — fresh paint, staging, light improvements — will sell quickly.
Like we experience in most years, selling in June, July, and August can take longer. Sale prices may not be as high as in other months due to increased inventory and buyer activity slowing down with more options, people traveling, etc.
Notes for Buyers
If you’re looking to buy a house in today’s market, it can still be competitive out there. It’s probably going to get a little easier in June, July, and August with increased inventory and homes sitting on the market longer. Once we get into the fall, it will become more competitive again.
If the goal is to buy this year, I would recommend getting pre-approved and to start seriously looking now. On average, buyers will spend 3-4 months looking at homes and doing research before they actually buy a home.
You may time it just right if you start this process now. Or If you wait until later in the year, you’ll find it’s more competitive in September – October. If you haven’t managed to buy a home by then, you’re going to find yourself with limited options until about April next year.
I think our current inventory issue is going to prevent prices from falling much further. Some believe that mortgage rates will drop next year, which would likely mean an increase in prices. Next year will also mark two years since the market began to shift in 2022.
Looking back at when the market fell in the fall of 2008, it wasn’t more than 2-3 years before prices started increasing again. And then we were dealing with the mortgage crises, foreclosures, etc. With that in mind, it would seem like the window we’re in right now is due to close within another year or so.
If you, or someone you know, is interested in buying or selling a home, I would be honored to help. I’ve been working with clients for 16 years and sincerely enjoy helping people through this process.
April 21, 2023