October 2022 marked the third consecutive month of a decline in Median Sales Price, according to the latest RE/MAX National Housing Report. October also saw 30.7% fewer closings and 36.8% more homes for sale compared to the same time last year. And at 35 days on market, the average home took nearly a week longer to sell than it did in October 2021.
These notable metrics are a proof point of the changing housing market landscape since the onset of the COVID-19 pandemic over two years ago.
Although industry reports are revealing a continued decline in home sales, (the National Association of REALTORS® Existing Home Sales report showed sales retreated for the ninth straight month in October), RE/MAX President and CEO Nick Bailey said in a recent interview with Real Estate News that a slower housing market isn’t reason for concern.
“This is certainly just a rebalancing that is giving buyers a chance again,” Bailey said.
He notes homebuyers are having to look more closely at the total cost of owning a home – not just the down payment and interest rate.
"In these conditions, homebuyers should be able to consider multiple properties instead of fighting over one. For many buyers, it's less about the actual interest rate right now, and more about affording the down payment and monthly mortgage payments, and [determining] whether the property fits their needs,” said Bailey.
Purchasing a home is often the largest financial transaction one will make in their lifetime so it can be good news when Days on Market, the number of days between when a home is first listed in an MLS and a sales contract is signed, sees an increase. That’s what Christine Dupont Patz, Broker Associate and Co-Owner of RE/MAX Cherry Creek in Colorado found when working with clients in Denver recently.
She told RE/MAX, “Buyers are taking a breath and are not as rushed as they were in the spring. There is much more negotiating – from price and concessions to inspection items. We're hearing the word 'value' a lot more from buyers – they want to be sure that the home value warrants dealing with the higher interest rates."
In October 2022, Dupont Patz’ Denver market saw a year-over-year increase of 118.8 % in Days on Market, going from 15 to 32 average days.
Here is the need-to-know data from the October 2022 RE/MAX National Housing Report:
Home Sales Continue to Dip
Of the 53 metro areas surveyed in October 2022, the overall number of home sales is down 13.5% compared to September 2022, and down 30.7% compared to October 2021. The markets with the biggest decrease in year-over-year sales percentage were Salt Lake City, UT at -48.3%, Las Vegas, NV at -45.3%, and San Diego, CA at -42.0%. No metro area had a year-over-year sales percentage increase in October.
Which brings us to…
There Are Now More Homes for Sale
The 2.3 months' supply of inventory in October was up from 2.0 in September and 1.3 one year ago. The number of homes for sale has grown in six of the last seven months. In October 2022, the markets with the lowest months' supply of inventory were Albuquerque, NM and Manchester, NH, tied at 1.0, followed by Hartford, CT and Trenton, NJ, tied at 1.1.
On Average, Homes Are Selling Below Asking Price
The average Close-to-List Price Ratio in October was 98%, meaning that homes sold for 2% less than the asking price. The ratio was 99% in August and September after being at 100% or above through the first seven months of 2022. It was 101% in October 2021. The metro areas with the lowest close-to-list price ratio were San Francisco, CA at 92%, Miami, FL at 95%, and Bozeman, MT at 96%. The highest close-to-list price ratios were a tie between Burlington, VT and Hartford, CT at 102%, followed by Manchester, NH and Richmond, VA tied at 101%.
When buying or selling, consider working with an experienced real estate professional whose job is to help consumers understand their options, including alternative mortgage products that can help buyers get more competitive financing.
P.S. If you’re looking to sell soon, check out this episode of Keepin’ It Real with Nick Bailey which discusses home improvements and resale value.
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