2023 Market Results

 The number of new listings dropped 22.2% in the first six months of the year. Desperate buyers and a lack of homes for sale meant that almost every listing received multiple offers. The summer housing market was intense and bidding wars were common place. In July, we received 14 offers within 24 hours on a brick ranch home that we listed in West Carrollton. It was not unusual for us to be reviewing offers via text with agents while talking on the phone with clients as we negotiated the best deal possible. In a word, the first half of 2023 was frenzied.

 Why was the number of new listings the lowest we have seen in more than 6 years? Many homeowners were sitting with mortgage rates at 2.5-3.0%. Staying in their existing home made more financial sense than selling since they would need to purchase a property with interest rates over 6%. So unless there was a compelling reason to move, many decided to stay put. The shortage in housing continued to push average sale prices higher even as interest rates were rising. It was a good time to be a seller and a very difficult time to be a buyer.

 On average, it took 61 days to sell a property in 2023. Sellers who priced their homes correctly at, or slightly below, market value saw their houses sell quickly, typically with multiple offers over the listing price. Those who tried to price their home too high, were forced to take reductions. Buyers facing higher interest rates and increasing home prices were unwilling to spend more than a property was worth. Their housing dollar was already stretched too thin.

 While looking back at the 2023 results for Montgomery, Greene, and Warren Counties tells us a lot about our market, it is difficult to see how much it changed just by looking at the topside numbers and averages.

A Year of Change

 In August something interesting happened. For the first time in more than a year, we saw an increase in the number of new listings vs the prior year. That trend continued through the rest of 2023. In October, new listings increased 10.6% and in November by 16.2% vs 2022. (Contrast that to the -29.8% decrease in new listings that buyers faced in the month of April.) All of those new listings in the second half of the year began to drive up the total number of available homes in the market. By the time we reached October, the number of active listings was up 7.6% vs last year. That was the highest inventory jump we have seen in 5 years. By the time we hit December, there were 21% more homes for sale than in 2022. It was definitely a year of contrasts.

 The higher inventory levels for the second half of the year helped increase sales, especially in the 4th quarter. While sales still lagged behind 2022 numbers, they were only down 3.3%. That is a huge gain over 3rd quarter when sales fell 17.2% vs last year!

 The average sale price of homes continued to rise, but the pace of increase slowed. Prices for the year rose 6.5% which was the lowest year-over-year increase since 2018. In a typical year, sale prices in November and December drop 9-12% from their high in May and June. This year, they only fell 2% in the 4th quarter. It is noteworthy that the highest average sale prices of the year vs 2022 happened in November and December despite the increase in inventory levels.

So what does this mean for 2024?

 While we do not have a crystal ball, market experts and our local market trends point to a couple of big changes in real estate this year.

Better inventory levels for buyers

 Based on the the last 6 months, there is every reason to believe that inventory levels will continue to ease in 2024. New home construction continues at a brisk pace. Several of our clients built houses in 2023 and we think that trend will continue this year. Now that interest rates have stabilized, existing home inventories should also increase as current owners finally decide to make a change and list their homes for sale.

 While it will take some time for the increase in housing to make a big impact, we should see the market shift in the buyer’s favor. We are still a long way from a balanced market, but there will be more houses available for buyers this year.

Lower interest rates

 The Fed has signaled that if inflation stays where it is, that they will adjust rates as many as 4 times in 2024. There is a lot that can change, particularly in an election year, but there is optimism looking forward. If rates drop, even a little, we will start to see more homeowners willing to get back into the market even if it means trading in their lower interest rates to do so. Buyers who jumped to the sidelines during the rate hikes of 2023, will also get back into the game if we see lower rates this year. Time will tell if the increase in housing supply will be enough to meet the needs of the additional buyers.

 Have you been considering buying or selling this year? 2024 should be a better market for buyers, but housing inventories will still be low. It is important to put together a plan to ensure you can get what you need. Give us a call so we can help you achieve your goals this year.

Market Predictions for the last 3 months of 2023

We don’t have a crystal ball, but there are some things we can predict for the last few months of this year. While the market continues to cool from the frenzied pace set during the months of May through August, there is still plenty of life left in the market for both buyers and sellers in 2023. We have listed 4 take-aways for the last three months of the year below.

Interest Rates

Interest Rates will likely remain at or above 7% for the near future. While the Fed opted not to raise rates in September, mortgage rates are still on the rise this week. Many experts predict one more rate hike before the year’s end as the Fed works to combat inflation. While these rates are high compared to recent years, they are not high from a historical perspective. If interest rates are the only thing keeping you out of the market right now, you may want to reconsider. It is very difficult to “time the market” when purchasing a property as there is no way to predict what will happen to interest rates in the future. As a buyer, your best strategy is to work on improving your credit score and shop around with lenders for the best rates. Saving up for a larger down payment will also help to minimize the effect of higher rates. Don’t forget that if mortgage rates do go down in the future, you can always refinance.

If you plan to list your house in the coming months, pricing it correctly will be critical. Buyers may have to lower their budget to keep their monthly payments in line due to increased mortgage rates. They are not likely to pay more than a home’s true market value, so make sure your list price is based on recent comps.

Housing Prices

The average home price in the Miami Valley is $251,297, which is up 44.9% vs 2019 when our average price was $173,373. Year-to-date local home prices have risen an average of 4.9% over last year. This is a big improvement over the double digit increases we have been seeing since 2020.

We get asked about a “pricing bubble” at least once a week. Many think that a sharp drop in housing prices is just around the corner, but the factors at work in today’s market are very different than those during the housing crash in 2008. The primary driver of increased prices in this market is a lack of supply relative to the amount of buyers looking for homes. While there is no pricing crash around the corner, we should continue to see home prices moderate. Year-over-year increases of 3-5% should be the norm going forward.

Housing Inventories

Housing inventories have been dropping since 2019. Year-to-date through the end of August, we have 8.2% less inventory than a year ago and 33.5% less than the same time frame 5 years ago. The good news for those looking to purchase a home in the next few months is that there are a lot fewer buyers in the market. The new school year, higher interest rates and inflationary prices have driven many buyers to the sidelines for the rest of 2023. Fewer buyers mean less competition and better inventory levels going forward. If you are having difficulty finding a home that suits your needs, new construction may be a good option. We have helped 5 clients find a builder and start work on new homes this year. There are builders at many price points in our community. If you think this might be a good option for you give us a call.

Sellers need to keep in mind that higher inventory levels will mean more competition from comparable properties. Ensuring your home is well priced and properly staged will bring more buyers and better offers.

Buyers

The start of the school year always reduces the amount of buyers in the market. This time of year brings price reductions in the market as sellers get more realistic on pricing. Well priced homes in good condition still sell quickly, but we are not seeing many bidding wars or multiple offer situations. While the months of January and February tend to yield the lowest average prices of the year, they also have the lowest inventory levels. The months of October-December give buyers lower average prices than the hectic summer months, but offer more inventory than the early months of the year. If you are thinking of purchasing a home, this is a good time to start your search. If you are considering selling, you will have more buyers and may get a better selling price now than in January or February of 2024.

If you are considering selling or buying, there is still plenty of time in 2023. Just give us a call and we can put together a plan to achieve your housing goals this year.

Local Real Estate Market Recap

With the hustle of August, we are late getting you the results of the July real estate market for the Dayton area. Sales for the month were down 23.5% which is the sharpest decline vs 2022 that we have seen since January. New listings were down 14.6%, but that is an improvement over the prior three months when inventories dropped between 25.0-26.7% vs last year.

Average sale prices continue to rise vs last year. In July the average home sold for $266,457 which is 6.6% above 2022 and the highest rate increase we have seen since March. Overall for the year, the rates of price increases are lower than the previous 3 years which were in the double digits. Rising interest rates over the past 12 months have significantly affected mortgage payments and the prices that buyers are able to afford.

Looking ahead to the fall market

1. High interest rates will continue to affect affordability

As we write this, interest rates are at a 21 year high. Many experts had been anticipating rates were going to improve as we headed into the 3rd and 4th quarter this year, but now the outlook is not as promising. While forecasts are still showing rate improvements, we may have to wait until 2024 to see them. These higher rates will continue to put pressure on inventory levels as sellers with lower interest rates stay put instead of purchasing a home and taking on loans at higher rates.

Sellers need to be particularly careful when pricing their homes this fall. More buyers are moving to the sidelines waiting for lower rates and those still in the market are able to afford less home than they could a few months ago. With fewer buyers in the market, we do not expect to see as many multiple offer situations as we move through the next couple of months. Sellers need to understand the current market and pay attention to comparable properties when deciding how to price their home. They are better off pricing their home slightly under market value than slightly over it. A more conservative price will generate more interest from buyers and could increase the purchase price above the list price if you do find yourself in a multiple-offer situation.

2. Buyers still in the market may see better pricing.

We will be sending out the August market recap in about two weeks and based on our current observations, we are expecting to see the days to sell increase. Over the past couple of weeks we have also been seeing a lot more price reductions on current listings. As an example, 83 sellers have lowered their listing price within the last 24 hours.

Buyers who are paying cash or who need to move despite the higher interest rates are likely to find better pricing on homes and less competition as we move forward into the fall and winter. It looks like purchasing a home this fall will be less frustrating for buyers and once interest rates drop, those who will be financing a purchase this year will be able to refinance their loans at lower rates.

Are you considering a move in late 2023 or 2024? Let us know. We would love to work with you to put together a plan that will help you achieve your housing goals this year.

June Housing Market Recap

Hello! It’s been a while since we have posted a blog article. Between the busy summer real estate season, travel (for both Pat & Karen), and Karen’s kitchen remodel, we have had our hands full. We carved out some time for this post because we think it’s important to update you on the current market.

June market snapshot

If you look at the information above, you will see that sales for the month were down 16.3% vs 2022, but new listings fell almost 26%. Our area, like much of the country, continues to suffer from a shortage of housing. There simply are not enough homes for all of the current buyers. It is still a very good market for sellers.

As you would expect, that lack of inventory pushes the average sales price higher year-over-year. For the month, the average sale price increased to $268,332 which is up 5.3% vs 2022. The good news for buyers is that year-to-date sales prices increased just 4.4%. That is an improvement over 2022 when sales prices were up 11.6%. We are seeing prices begin to stabilize after the large increases over the past few years.

Why are homes taking longer to sell if there are fewer homes?

The answer is higher interest rates vs last year. Buyers are unwilling to overspend on a home when they are dealing with increases in mortgage rates coupled with rising home prices. Sellers who price their homes over the market value struggle to tempt buyers. Many of them are reluctant to take reductions on their overpriced listings, and so their properties sit on the market for long periods of time. It is the stubbornness of these overpriced home sellers causing the increase, it is not a lack of well qualified buyers.

Should I get into the market now or wait a little longer?

Our local housing market is strong. Well-priced homes are selling very quickly, often with multiple offers. We are still in a seller’s market, but buyers have more power this year than they have had in a long while. Interest rates and home prices are stabilizing and we are seeing lots of new housing in our area. If you are considering selling, buying or building a home, please give us a call. This is a good time to get into the market and we would love to put together a plan to meet your housing goals.

May 2023 Local Housing Market Recap

Unit sales for May lagged behind last year’s results by 16.4% or 256 units. This was primarily a function of our continued lack of housing inventory. New listings dropped by 549 units or almost 27% for the month vs. 2022 and total listings were down 739 units vs. LY.

It took 59 days on average for a home to sell in May which is down significantly from prior months where that total was 63-74 days. The average sales price for local homes was $259,665 for the month which is essentially flat vs last year. This is a little surprising when looking at the lack of inventory, but is not unexpected as we have seen significant price increases for the past several years. For example, the average price in May 2022 was approximately $35,000 higher than in May 2021.

2 takeaways from the May market

1. Buyers need to act quickly

If you plan to purchase a home this summer, get a pre-approval letter from your lender and make sure that you are checking your portal daily. If you see a home that may work for you, reach out to your agent quickly. If you wait to schedule a showing, the house may go under contract before you can see it. Work with your agent to craft an offer that is appealing to the seller, keeping in mind that price is not the only tool you can use to win the deal.

2. Well-priced homes continue to sell quickly but buyers are cautious on pricing.

The market remains competitive for buyers. Multiple offer situations are still quite common. Our May sellers all received at least 2-3 offers within 48 hours of putting their homes on the market. Likewise, we had to craft offers for our buyers clients knowing that we were in competition with other buyers for the same property.

Many buyers are being more cautious on their offer price and are finding other ways to make their offer more appealing to sellers. We have noticed that appraisal gaps are playing a bigger role in negotiations this year. Our sellers have been more likely to choose a lower offer with an appraisal gap rather than a higher offer price without one for fear that their home may not appraise for the higher offer price. It is important that buyer agents contact the seller’s agent before writing an offer to find out what is important to the seller. Buyer agents who tailor their offer to the seller’s needs will have a leg up in negotiations.

Sellers need to understand the current market and pay attention to comparable properties when deciding how to price their home. They are better off pricing their home slightly under market value than slightly over it. A more conservative price will generate more interest from buyers and could increase the purchase price above the list price if you find yourself in a multiple-offer situation.

Are you considering a move in 2023? Let us know. We would love to work with you to put together a plan that will help you achieve your housing goals this year.

Local Housing Update – March

The Dayton area market continues to feel the effects of inventory shortages and higher interest rates. Unit sales for March lagged behind last year’s results by 174 units. This shouldn’t be surprising considering that new listings dropped by 307 units or almost 18% vs the same period last year. The slowdown in new listings also dragged down the number of total active listings which shrank by 5.3% vs 2022.

The average sales price for local homes was $249,201 for the month vs. $230,878 last year. While an 8% increase is still significant, is it not as dramatic as the 13.5% jump in prices that we saw from March 2021 to 2022. Assuming that inventory levels pick up as we move through April and May, price growth should remain in the single digits as we move forward.

2 takeaways from the March market

1. Well-priced homes continue to sell quickly while their higher-priced counterparts linger on the market.

The market remains competitive for buyers. There is still an inventory shortage and properties that are priced correctly are selling quickly, sometimes within a day or two of hitting the market. Multiple-offer situations are still quite common. If you look at the graphic above, you will notice that, on average, homes are taking an additional 10 days to sell vs last year. The reason for this change is pricing. Buyers in 2023 are paying higher mortgage rates than a year ago due to increased interest rates. They are more price sensitive and far less likely to overpay for a home. Houses that are priced above their market value are sitting on the market for longer periods of time until sellers lower the price. It is vitally important that sellers understand the market and pay attention to comparable properties when deciding how to price their home. Sellers are better off pricing their home slightly under market value than slightly over it. A more conservative price will generate more interest from buyers and could increase the purchase price above the list price if you find yourself in a multiple-offer situation.

2. Buyers need to act quickly if they see a property they like

If you plan to purchase a home this spring, make sure that you are checking your portal daily and that you reach out to your agent to see a property of interest as quickly as you can. Inventory levels remain very low. If you wait to schedule a showing, the house may go under contract before you can see it. Have your pre-approval letter ready and be prepared to write an offer quickly if you find the right house. Work with your agent to craft an offer that is appealing to the seller, keeping in mind that price is not the only tool you can use to win the deal.

Are you considering a move in 2023? Let us know. We would love to work with you to put together a plan that will help you achieve your housing goals this year.

Local Market Update – February

February home sales for the Dayton area fell 10% vs 2022, but they improved over the January results which were down a whopping 31.5% vs last year. The number of new listings was down 7.8% for the month, but the lower unit sales meant that in total, there were more active properties on the market than we saw in 2022.

Our average sales price for February was $230,695, which is a 6% increase vs 2022. Prices are rising at a slower pace than they have for the past two years. In 2022, February prices increased by 12.9% and they rose by 10.6% in 2021. The average number of days it took to sell a home in February jumped up to 76 days which matched the results from 2021 but was a sharp increase over the 66 days it took in 2022. Overall, we are seeing fewer sales, increased inventories, and homes staying on the market for longer periods of time. All three of these changes are the outcome of rising interest rates and fewer buyers.

2 takeaways from the February market

1. Sellers need to review comps carefully and work with their Realtor to price their homes correctly

Higher interest rates mean increased mortgage payments for buyers. They are much more price-conscious this year and will often avoid homes that are overpriced. As a seller, you are better served by slightly underpricing your home than overpricing it. This is NOT the time to stretch the price to “see what you can get”. Properties that are priced correctly will sell quickly and get better offers. If your home sits on the market for more than a few days and is not getting many showings, you need to react quickly and reduce the price or risk buyers thinking there is something wrong with your house.

2. Buyers need to act quickly if they see a property they like

Total housing inventory levels are higher than a year ago, but a portion of the market is overpriced. Some sellers have not gotten the message that interest rates are higher and that buyers are more conservative about home prices. Well-priced properties are selling VERY quickly, often within 1-3 days with multiple offers. If you plan to purchase a home this spring, make sure that you are checking your portal daily and that you reach out to your agent to see a property of interest as quickly as you can. If you wait, it may go under contract before you can see it. Have your pre-approval letter ready and be prepared to write an offer quickly if you find the right house.

The spring real estate season is heating up. It is a good market for both buyers and sellers. Our last two listings sold within the first 24 hours with multiple offers. Escalation clauses are still common (although we are seeing price caps that are much more conservative than a year ago) but many buyers are not making as many concessions as they did in 2022. While it is still a seller’s market, there are fewer homebuyers this spring, so buyers have more power than they did a year ago. Sellers need to remember that buyers are eager to find a home, but are facing higher interest rates and are unwilling to pay more than the home’s market value.

If you or someone you know is considering a move this year, please let us know. We would love to put our experience to work and put together a plan to get you to the closing table.

Real Estate Tips for Buyers & Sellers

We are just getting into March and there are some early indications of what the market may look like this spring and summer. Pat & Karen have been working with both sellers and buyers through the first two months of the year and there are patterns emerging. Higher interest rates have had a big impact on the market and unit sales are lagging behind 2022. Fewer sales have meant that inventory levels are slightly better than last year, but remain quite low. Well-priced homes are still selling quickly. We have come up with 14 tips for buyers and sellers to help you navigate the market this spring.

Buyers

Without a doubt, the biggest change for buyers this year vs 2022 is higher interest rates. Rising rates have forced some buyers out of the market, so there is less competition for homes. Housing inventories are still low from a historical perspective, so while you may have more choices than last year, there is still a noticeable lack of inventory at every price point. Homes that are priced correctly and in good condition are selling quickly, some with multiple offers. In general, we have noticed that offer prices in the past few months are more conservative than they were in early 2022.

9 Tips for buyers:

Check your credit score. A good credit score can help you get better interest rates & lower your monthly payment. If your credit score isn’t good, take some time to improve it before purchasing a home.

Shop around for mortgage rates and talk to your lender about loan options that meet your needs. Most importantly get a pre-approval letter. You can’t write an offer without one.

If you need to sell your home before buying, get your home on the market and under contract before looking at homes. Sellers in this market will not accept an offer unless your home is under contract and heading to closing.

Make a list of must-haves, but prepare to be flexible. While inventories seem to have stabilized, they are still very low from a historical perspective. If you are not finding homes in your budget that work for you, consider altering your list of must-haves. Even a small adjustment may increase your choices.

Be responsive. Homes are still selling very quickly. If there is a home you are interested in, make arrangements to see it as soon as possible. If you wait, it may go under contract before you see it.

Consider an escalation clause. Escalation clauses can eliminate the need to guess at the right price in a multiple-offer situation. Set a cap price within your housing budget to make sure you don’t overpay.

Appraisal gaps can help you win the deal. The offer with the highest price does not always win the house. Often there are other terms that are more important to a seller. An appraisal gap is a guarantee from the buyer that they will pay the difference if a seller’s home gets a short appraisal. It gives the seller peace of mind that they will not lose net proceeds due to an appraisal issue.

Don’t skip the inspection, but limit your list of repair requests. We always recommend that our buyers inspect the properties that they are purchasing, but there are ways to give the seller more favorable inspection terms. If you are handy and the home has been well maintained, you can opt to inspect for your own knowledge or limit what kinds of repairs you ask for.

Be Patient. It may take weeks or even months to find the right home. Be patient but be ready to act quickly and write an offer right away when the right property comes onto the market.

Sellers

We are still in a seller’s market since housing inventories remain low, but the market is very different than it was in early 2022. Higher interest rates have had a dramatic effect. Housing prices are stabilizing and rising at a much slower pace than they have for the past couple of years. Buyers have seen their monthly mortgage payments rise dramatically vs 2022. Their willingness to put in offers above the asking price has dropped off sharply. Homes, especially those that are not priced correctly, are sitting on the market longer and we are seeing price reductions as sellers readjust their expectations.

5 Tips for Sellers

Pricing your home correctly is essential! Make sure you are looking at good comparables. Listen to your Realtor’s advice. Do not overestimate your home’s value. Buyers are much more conservative this year and are unwilling to overpay. Overpricing your home means that it will sit on the market longer and will attract fewer serious buyers. The longer your home sits on the market – the lower its value in the eyes of buyers.

Staging your home to sell will bring you higher offers. Curb appeal, cleanliness, and staging will help your property stand out from the competition. Last year, it felt like sellers didn’t need to do much to attract buyers, that is no longer the case.

Most buyers have adjusted the top end of their budget downward to accommodate interest rate increases. Higher interest rates mean that buyers’ mortgage payments may have jumped between $280-$1000 per month for a property of the same price. There may be fewer buyers shopping in your price range, so be prepared to consider every offer.

Expect more conservative offers. Last year it was rare for buyers to submit offers below the listing price. In multiple-offer situations, the offers were sometimes significantly above the asking price. This spring, buyers may be more conservative on pricing and other terms when writing offers.

Don’t focus exclusively on the price. There are a lot of terms that can make an offer more appealing including appraisal gaps, tax proration, buyer financing, and the closing date. Your agent can help you review offers so you can compare them objectively and make the best decision to meet your needs.

2023 is starting out as a good year for both buyers and sellers. Interest rates are higher than they have been for the past few years, but they are low from a historical perspective. It is still a seller’s market, but inventory levels and housing prices are stabilizing. Many buyers are getting back into the market but are more price sensitive since their housing dollar buys them less than it did in 2022. While the power dynamic is still in the seller’s favor, buyers are benefitting from less competition and more housing choices.

If you are considering a move in 2023, we would love to help. We can sit down with you to access your needs and formulate a plan to get you to the closing table.

Local Market Update – January 2023

The Dayton area was still feeling the effects of higher interest rates in January. In total, just 716 homes were sold (this includes single-family, attached homes, and condos). That is the lowest number of unit sales that we have seen since before 2017. It was a 31.5% drop vs January sales in 2022. We started seeing double-digit decreases in sales numbers starting in September of last year and those drops continued through the end of 2022.

New listings were also down for the month, but the lower sales numbers meant that our total number of listings increased above our January 2022 inventory levels. New listings began dropping significantly in July of 2022 as interest rates continued their climb. October saw the biggest drop in the number of listings with a shortfall of almost 18% fewer homes than in 2021. Even though we had 6.6% fewer listings for the month, we are continuing to see an improvement in the number of new listings since October.

We are also seeing the number of days continue to rise. It took an average of 74 days to sell a house this January vs. 69 days in 2022. As a point of reference, it took 75 days on average to sell a home in January 2021. While the average sale price continued to increase over last year, the rate of increase is slowing. In January 2022, the average sale price increased 10% vs 2021 vs the current increase of 7.1%,

It looks like early 2023 will still be a seller’s market, but it should not be like the frenzy of early 2022. The market is shifting and the needle is moving to give buyers more power. With fewer of them in the market and total inventory levels slightly above last year, we should see less competition. We are also seeing a lot more price reductions as homes sit on the market longer than they did a year ago. The predicted moderation of interest rates between 5.5-6.5% should also be good news for buyers that may have paused their search in the 3rd and 4th quarters due to rising interest rates and economic uncertainty.

While the market is still not balanced, it appears to be heading in a more healthy direction in 2023. It should be a good market for sellers who may still get higher prices than a year ago, and we should see buyers with more negotiating power and less need for offers significantly over the listing price.

If you are considering a move in 2023, please give us a call. We are happy to meet with you and put together a plan to meet your needs.

2022 Dayton Housing Recap & Predictions for 2023

2022 was a challenging year for the housing market. Buyers & sellers faced very tight housing inventories early in the year which lead to multiple offer situations and home sales well above their list prices. As the year progressed, rapidly rising interest rates had a significant impact on the market. Interest rates on 30-year fixed mortgages were just under 4% in early March and by the fall they were over 7%. The sharp increases in interest rates drove many buyers out of the market during the 4th quarter.

2022 Recap

You can see the market effect of higher interest rates in December which saw a 27% drop in sales vs. 2021. Inventory levels were lower than last year, which continued the year-long trend. For the month, there were 10.5% fewer new listings than in 2021. December’s average sale price was $231,308 which was 5.9% higher than a year ago. While this is a significant increase, it is important to compare it to April when the interest rates were lower than they were in the 4th quarter. In April 2022 prices increased by 19.6% vs 2021. So while prices were higher in December vs last year, the rate of increase had slowed significantly.

If we look at statistics for the year, the average sale price in 2022 was 9.3% above 2021. Average sale prices have been climbing rapidly in the Miami Valley for the past 5 years. The average sale price for a home in 2018 was $165,511. In 5 years, that price has climbed 39.8% or more than $65,000! That is great news for homeowners who can cash in on the extra equity when it comes time to sell or tap into that equity for renovations. The large increase in home prices combined with higher interest rates forced many first-time buyers out of the market.

With fewer buyers looking for homes, we have seen a small increase in the length of time houses stayed on the market in the 4th quarter. It took 67 days to sell a home in December 2022 vs. 66 days in 2021. This change in time on the market forced some sellers to take price reductions to get their properties under contract. From a historical perspective, our low inventory levels mean that homes are still selling more quickly than they did years ago. In 2018, homes took 83 days to sell vs. just 61 days in 2022.

2023 Predictions

What are experts predicting for the housing market in 2023? Lawrence Yun, the NAR Chief Economist commented, “I see many hopeful signs for early next year”. In his comments on January 12th he added, “The 30-year mortgage rate dropping under 6% is now a distinct possibility. The gate is beginning to open for homebuyers who got shut out in October and November when the rates went above 7%. However, there is still a housing shortage and not enough listings.”

Many experts are predicting a drop in home prices in some markets across the country. Our low inventory levels will likely prevent that from happening, but we should see a slowdown in the rate of increase. Home prices should start to level off as long as we see increased inventory levels through the spring.

If you’d like to read more about 2023 housing predictions, check out these articles:

“5 Expert Predictions for the Housing Market in 2023” (Leslie Cook), Money

“Housing Market Predictions for 2023: Will Home Prices Drop” (Robin Rothstein), Forbes

“Housing Market Predictions: Six Experts Weigh in on the Real Estate Outlook in 2023” (Swampna Venugopal Ramaswamy) USA Today

If you have been considering buying or selling a home in 2023, January is an excellent time to start planning. We are already helping several sellers get their homes ready for the market later this year. We would love to help you achieve your housing goals in 2023!