Market Review - Comparing 2023 to 2022
We think we are seeing the start of a shift in the market even though the data may tell a different story. The data often lags behind because closing dates can be six weeks behind contract dates. And It’s after a property closes that we see contract price and other data.
Sometimes market data is set aside to consider actual on-the-job impressions of the market from agents who are actively helping buyers and sellers. We at The Malley Group are noticing that some higher priced listings seem to have fewer showings and fewer offers. They are staying on the market for a bit longer. And it’s not just our listings, of course, we are studying the market as a whole.
What conclusions can we draw from what we see happening in our practice and what we see in the data? We cannot say unequivocally, but we are sensing the possibility of a shift in the market that is starting in the higher price ranges. We feel that shift will eventually trickle down to the lower price ranges.
Consider this: In the $700,000 and up price range in Chittenden County, the average number of days for a seller to accept a contract on a single family or a condo rose from 24 in 2022 to 40 in 2023. The average and median sales prices were flat compared to past month-over-month increases. Of significance, in 2022, there were 202 homes listed in that higher price range and 139 sold, while in 2023, only 139 were listed and 97 sold. You might say this still looks like a seller’s market when looking at supply and demand – the supply has gone way down. But, coupled with the number of days on the market, we are feeling the buyer pool is diminishing. Why is that? The interest rates are at a high for 2023. While the law of supply and demand – high demand and low supply pushes prices up - the key is demand. And if the demand is down, supplies will rise. When supplies rise, prices will drop. When prices drop, the market shifts.
We certainly are not predicting another 2008. That drop was from a complicated economic and banking climate. But we are expecting a continued increase in the number of days on the market because interest rates are at a high for the year, and the buyer pool is diminishing. Especially in the higher price ranges, we predict a shift will trickle down to some of the lower priced homes.
What does this mean? We feel it will be an eventual return to a more balanced market. First-time buyers may have more of a chance to win multiple offers and will not have to compete as much. Heck, they might be able to win and still have an inspection to know what repairs are ahead of them rather than purchasing without an inspection in order to get an offer accepted.
We cannot say for sure that this is the start of a shift. But in the coming months, we will be looking carefully at the data, noticing in our own practices what changes might be happening, and keeping up on our predictions that might turn into the start of a trend.
