Comparing Third Quarter of 2023 to 2022

I look at condos and single-family homes together to see how the market has changed year-over-year in the third quarter. For this month’s newsletter, I also analyzed single family homes by themselves. I am looking specifically at Chittenden County only for this analysis.

In Q3 of 2022, 551 condos and single-family homes sold compared to 444 in 2023 for a reduction of 19.4%. No wonder buyers are having difficulty finding homes to buy. As I am writing this, there are currently only 174 condos and single-family homes together for sale. Many of these are under construction, so if someone needs a move-in ready home, there are even fewer choices.

The median sales price was $457,500 in 2022 compared to $488,250 in 2023 for an increase of 6.3%. The median days on the market were the same year-over-year, only 6 days to get an accepted offer. It’s a “snooze and you lose” market given the speed of buyers. Buyers who have been in the market for some time are tired of the search and tired of losing out in multiple offer situations. The average sales price in 2002 over the asking price was 100.4% and in 2023, 103.5%. So in order to get their offer accepted, buyers are offering over asking. 

Interestingly, if I look at single family homes by themselves, the median sales price in 2022 was $520,000 compared to $555,000 in 2023 for an increase of 6.3%, exactly the same percentage increase when putting single family and condos together!

What does all of this mean to the consumer? With so few homes for sale, sellers are hesitant to sell as they are unsure where they will go. Rentals are difficult to find and very expensive. Who wants to pay their landlord’s mortgage when they can be paying down their own mortgage? In my opinion, this accounts for why there are fewer homes sold in 2023. Some buyers are feeling that with such a small inventory, they must go with a new build, but the costs of supplies have gotten so expensive that new home costs are extremely high. And then there are the interest rates… Sellers are hesitant to get rid of a sub-3% interest rate for a 7.5% or higher interest rate.

Some buyers are choosing to live farther from Chittenden County and commute. And as an alternative to selling and buying, some sellers are choosing to take equity out of their homes and are building an addition to their current homes rather than selling and moving. 

All these factors can create a market that feels stalled, and one where supply is down, demand is up, and prices continue to increase. Some buyers are waiting until the spring, hoping interest rates will drop. But if interest rates drop, there will be more buyers and more competition. Right now, going into a slower season where sellers on the market are very motivated to sell may be the best time to buy!