The holiday season means December is typically the slowest month of the year when it comes to real estate deal making. It routinely clocks the lowest number of listings going into contract, which means January typically posts the lowest monthly number of closed sales. Now, early 2023 data is suggesting that home buyers are beginning to jump back into the market.
New Listings & Sold
A downward trend of listing inventory and an upward trend of the number of properties sold indicates the seller is in a better negotiating position. The reverse is true as well–an uptrend trend in inventory and a downward trend in properties being sold indicates the buyer is in the better position for negotiations.
Real Estate is Ramping Up
It’s not uncommon for the market to begin waking up in mid-January, after the prolonged holiday slowdown, before really ramping up in the spring. This year, we have a few special considerations. Inflation has dropped substantially since June 2022, interest rates have continued to climb, home prices are well down from where they were last spring, and as of February 2, stock markets are up 8% (S&P) to 15% (Nasdaq) from last year. Despite escalating layoffs in the tech and media worlds, early indications in 2023 are pointing to a rebound in buyer demand.
Right now, we can point to an increase in open house traffic, buyers requesting listing disclosure packages, an uptick in multiple offers and an often-unexpected scenario overbidding of asking prices. Of course, much of this is anecdotal and it is quite preliminary, but it seems safe to say that buyer demand, which was seriously repressed by economic conditions in the second half of 2022, has begun to bounce back.
Remember when I said boots on the ground intel is going to pre-date any local or national statistics? Well, consider yourself newly informed. Across the country, not just in the markets I track, I’m hearing about increased open house and showing activity and a huge uptick in multiple offers depending on the home, location and price. In the words of one of my “mastermind” text threads about a SF home that just got 17 offers (and no, it was not intentionally underpriced to begin with.) “What slowdown?!”
Does this mean the housing market is out of the woods? Too soon to say that, but what it does mean is the trend lines are currently trending back up and my personal belief is it will take a black swan event (war with China, a sudden influx of inventory and none of my colleagues are reporting a ton of listings they plan to bring on, or an unexpected new higher spike in interest rates). Right now, if you’re waiting for the market to fall further, it does not appear to be trending in that direction.