We all have felt the supply crunch over the last couple years, but it just seemed to increase in intensity in Q3 this year. Looking at the single-family market, in Q3 2023, we were running an average of 4,170 homes available. This same period last year, we averaged 5,574. That is a 25.2% decrease in available homes!
On a national level, you will hear that available inventory is on the rise, which is true. However, there is more to the story. Months supply of inventory is calculated by finding the total number of active listings and then dividing by the average number of monthly sales. According to NAR, total sales on a national level were down to 4.04 million through August, which is a decrease of more than 15% compared to last year. As the number of home sales drops, the number of listings needed to keep inventory levels flat drops as well.
With the inventory crunch, we are still seeing prices appreciate as a whole. The single-family median sales price rose 5.21% compared to Q3 2022. That was an amazing increase with mortgage rates at a 27-year high during the same period. As always, real estate is a local business, and I have seen some local markets’ average prices decrease in Q3. It could be the mix of properties closing, and it could also be adjustments to the higher rates hitting certain markets more than others. The key is to be sure of your primary markets by using our market reports here in Pinergy. You may be surprised at the local story being different than the national results.
Sale-to-list price ratio in Q3 climbed up compared to Q3 2022 as well, 102.08 compared to 101.70—not far off from 103.79 in Q3 2021. This tells me that competition is on an upswing while fewer homes are available and that the demand for housing still outweighs the available inventory, pushing prices up. Buyers will need to act quickly to stay competitive in this market.
Finally, with the number of closed single-family units dropping 24.68%, the Q3 sales volume dropped to below 2019 levels. While this isn’t the news we want to hear, we can be encouraged by the opportunities sellers have to list in a very hot market with a very focused buyer pool ready to act.
We learn each year is different on some level, and this year has proven that again. I still believe this market holds great opportunity that can be very positive for sellers and buyers in the right situations. I wish you all the best for a prosperous and strong finish to 2023!
Feel free to give us a shout to discuss your market or real estate plans. We look forward to hearing from you. (508) 258-9589 or Contact Us
Posted with help from MLS Property Information Network, Inc.
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