Low Inventory and Increasing Days on Market | January 2023 San Clemente Housing Market Update
January has been a little bit crazy, to say the least. With wild rain and crazy winds coupled with unusually low inventory, we are in a very interesting housing market. Stay tuned for a breakdown of the seven key housing market statistics you need to know.
1. Demand - Demand is the number of pending sales over the month prior, which is currently up 4%. However, it is still incredibly low overall due to higher interest rates and low inventory.
2. Active Inventory - There are only 69 homes available on the market to purchase - that number is incredibly low! If we look at the last week of activity, there were eight new listings and an additional three listings that fell out of escrow and came back to active status.
3. Price Reductions - Out of the 69 active listings that are on the market, five of those had price reductions in the last week. You will see a lot of price reductions where sellers were a little too aggressive and targeted a price that was too high. Right now, buyers are not interested in going after listings that they feel are priced over market value. The homes that are listed correctly for fair market value are still selling within a matter of days on the market.
4. Interest Rates - We have seen some reprieve when it comes to interest rates. My lender this week is quoting rates in the high 5% range.
5. Closed Sales - In November, there were 41 closed sales. In December, there were 51 closed sales, and in January to date, there are 31 closed sales.
6. Expected Market Time - The moment your home is listed in the MLS is considered day zero on the market. If we look at the expected market time for homes between $1 and $2 million, it is currently 92 days. If you can believe it, last year that number was about 20 days.
For homes between $2 and $4 million, the expected market time is 116 days. While that may seem like a long time based on the numbers we're talking about, it actually falls into a balanced market. Last year, the expected market time for this price range was 34 days.
7. Selling Season - We're currently in the winter market and coming out of the holidays, which is always a very, very sluggish time of year. In the last seven days, I've seen a pickup in activity, and I only expect that to continue as more sellers put their homes on the market. We will ultimately see an increase in demand as well.
A general summary of everything we’re seeing:
For sellers putting their house on the market, your home has to be priced correctly. If you place your house on the market and you don't have an offer in 10 or 15 days, look at the number of showings that came through to see if there is healthy showing traffic. If not, the home is overpriced.
For buyers, rates are pulling back making it an opportune time to purchase. Why? Once rates find their equilibrium point, we are going to see housing prices and appreciation start to increase again. Right now, you might have negotiating power for a listing that was listed high and the seller is taking too long to bring the price of their home down.
With all that said, the market has shifted compared to the last couple of years. It doesn't matter what shoes you're in, I would love to talk strategy and figure out what steps we should take for your specific situation. Shoot me a text message or give me a call at (949) 620-6206 - I'd love to chat with you.