Happy fall everyone! If you’ve been reading the news, or even just seeing headlines, over the past couple of weeks you’ve likely seen an article or two signaling trouble with the real estate market.

Below is market data from Q3 2022 compared to Q3 2021 to help get a better understanding of where we are now and how it compares to last year.

Homes are selling closer to the list price

Transparent pricing has become more common, meaning that homes are priced conservatively closer to the sales price. Pricing “low to sell high” hasn’t entirely gone away, but it’s just not happening as frequently.

In regards to the sale price to list price ratios, we’re not seeing as much competitive overbidding across the board. But homes that show well and have features that buyers are looking for —such as prime locations, thoughtfully updated and remodeled, or with something special like a large lot or view are still doing very well on the market and selling over asking. Here are a few recent examples.

Average sales prices are lower

Sales prices, on average, are slightly lower than last year. And the average price per square foot is down slightly. Keep in mind there was a big increase from Q3 2021 to Q1 2022, and then of course a decrease from Q2 2022 to Q3 2022. Buyers have adjusted their budgets due to increasing mortgage rates and drops in stock prices, and we’re seeing that impact on offers and sales prices.

Properties are taking longer to sell

The time it takes a house to go into contract, or the average number of days on market is up. The numbers show it’s taking about 33% longer for homes to sell in Q3 2022 compared to Q3 2021.

There is less inventory

While the number of sales is down from this time last year, so is the number of new listings. Comparing the ratio of number of sales to new listings in Q3 2022 and 2021, the numbers show there was more demand in Q3 2021. The decrease in demand this year is likely due to the rise in mortgage interest rates and more leftover inventory from Q2 than we had in 2021. 

Moving forward, if the 4th quarter 2022 and 1st quarter 2023 are anything like previous years, we’ll probably have an inventory shortage beginning next month that will last through March or April. If the local buyer pool stays consistent, this could translate to the typical overbidding we see in February and March. Stay tuned!

Ps. If you, or anyone you know, are in the market to buy or sell please reach out or pass on my info 🙂