August 2023 Real Estate Market Update from Dave and Travis!
Here we are in August with Summer such as it was almost over! It can be hard to understand what is happening with residential real estate these days! Mortgage interest rates going up (the highest in 20 years!) & sales volume down significantly combined with LOW supply (still can’t find a home for many buyers), prices going up (about 5% so far this year) along with days on market! Its enough to give you whiplash!
A little good news for homebuyers is that the days of many multiple offers seemingly is calming down.
An example is our listing at 7600 Woodview Drive. We just pended this home after 8 days on the market..with 1 offer!
A couple months ago we would have likely had multiple offers! We are seeing days on market increasing, price reductions and more expired listings.
So the market is cooling for sure as I see it. Also just this week there were 4 appraisals in our office that came in below the agreed price. Pricing a home to attract a buyer AND get an appraisal takes much more experience & skill. We can help!
Looking at the overall numbers supply (active listings) & demand (pending sales) remains pretty solid.
We still have low inventory especially of existing homes. Sellers are holding back on selling and much of that has to do with the higher interest rates. Looking back over 5 years you can see the wild fluctuations between supply and demand (1st graph). We have about the same amount of active & pending sales currently.
I think this will remain the same at around 300 units even with the slowdown. September #’s will be interesting!
In 2023 YTD, we started the year in January with 193 active listings and 212 pending sales. Over the course of the year, both these numbers steadily grew, but pending sales consistently outpaced active listings.
By August, the number of active listings had grown to 317, while pending sales slightly outpaced it at 334.
The BIG question is will supply increase dramatically and or demand decrease as we move into Winter?
Now lets look at the number of sales, average sales price and days on market for the last 5 years.
First the number of sales is down about 40% from 2022 and about 20% from 2019! Certainly a big drop and pretty much what has happened nationwide. However the average sales price is higher than ever at $417,000, about a 4% increase from last year and a whopping almost 50% increase from 2019!
This increase in equity has been unprecedented in the history of real estate. Normal appreciation is about 4% per year historically.
Days on market are increasing as you would expect averaging 40 DOM for closed sales compared to 59 in 2019.
Next lets look at the Mat-su Valley real estate market segmented by price range for August 2023. As expected the $250-450,000 price range is very active with 36% of the active listings, 57% of the pending sales and 57% of the closed sales. Average days on market in this price range are 31. This compares to the $450-650,000 range days on market of 62 with 35% of active listings, 23% of pending sales and just 25% of closed sales.
If you have any questions or comments about these trends please reach out to me. I could use some opinions please! Your opinions matter a great deal to me!
Next, lets take a look at the relationship between existing homes and new construction. The average sales price was $417,816 across all homes, with existing homes slightly lower at $402,495 and new constructions much higher at $471,905. Looking first at New construction homes: 33% (106) of active listings and 36% (112) of pending sales. Closed sales sit at 22% (183). 2022 saw 223 closed sales (18%) with 2019 showing 158 closed sales (15%). Builders are doing their part and what we really need to ease the lack of inventory is for lots more existing homes to come on the market!
Travis and I are hustling trying to navigate help our people navigate,
what’s going on with this market so any questions just let us know
and we look forward to any feedback you may have.
Call us or simply reply to this email to set up a meeting.
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If you or anyone you know has ANY thoughts of buying or selling real estate, lets connect to talk about the opportunities available in our market and how to reach your goals.
LET US BE YOUR TRUSTED GUIDE
Call or text Dave now at 907-863-7289
Call or text Travis now at 907-575-6779
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