Inventory rose 69 percent and sales fell 38 percent to close out 2022 as the country moves away from the frenzied seller’s market and closer to equilibrium, according to a new market report from RE/MAX.
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The housing market continued its move away from frenzied highs of the COVID-19 housing market and closer to a balance between homebuyers and sellers in December, according to a new report from RE/MAX.
Homes were on the market for longer compared to a year earlier and sold for just below asking price, the report said. Inventory, meanwhile, remained at 2.5 months, the same level as in November, but more than double from a year earlier.
The numbers largely confirmed something real estate experts expected for 2023. They predict a more balanced market overall with house prices remaining broadly flat and continued declines in sales.
“Because we strongly believe in the benefits of homeownership, we think the ongoing market rebalancing is actually a good thing,” Nick Bailey, president and CEO of RE/MAX, said in a statement. “It puts buyers and sellers on a more equal footing, which is refreshing after so many years of sellers having the upper hand.”
RE/MAX generally defines a balanced market as one with stable prices, home sales at or near the asking price, and transactions that are completed in a reasonable amount of time (neither too quickly nor too slowly).
The report is based on MLS data for single-family homes in 53 markets, including most of the country’s largest metropolitan areas. The number of homes for sale has increased by 69 percent compared to December 2021. Home sales fell by 38 percent year-on-year.
It wasn’t just the month either. Sales decreased in each month of 2022 compared to 2021.
The median sales price was 1.3 percent higher in December than one year previously, but hOmes closed at an average of 98 percent of list price in December, according to the report. That was 5 percent less than in April and May.
“Sellers are still in a strong position, but buyers are gaining more power in what is likely to be one of the largest financial transactions of their lives,” Bailey said. “With mortgage rates and house prices appearing to be stabilizing, and with the dramatic increase we have seen in the number of homes for sale, both buyers and sellers have reason to be optimistic as we head into the new year.”
In fact, new listings fell sharply from November to December, the biggest monthly decline of the year. Houses spent 10 days more on the market – 47 days – than a year earlier.
Des Moines, Iowa, saw the largest stock drop in December 2022 compared to a year earlier. Last month there were 43.6 percent fewer homes on the list.
Salt Lake City saw the biggest increase in inventory, with 3.3 months of inventory compared to about 15 days a year ago. The city was in the top five markets surveyed for increases in days in market (60, up from 28) and decreases in closed deals (down 48.8 percent).
The median sales price fell the most in San Francisco (-5.1 percent) and Los Angeles (-4.7 percent), the report said.
“Looking ahead to 2023, the higher interest rate environment clearly poses some challenges – but as buyers, sellers and agents recalibrate their expectations, sales will continue to occur,” Bailey added. “The question has not disappeared. The question is which real estate professionals have the skills, experience, resources and adaptability to provide consumers with the guidance they will continue to need.”
Email Taylor Anderson