2023 is upon us and there's one month in the books! Let's get right to it: we're off to a slow start. Last year's momentum was lost in the last quarter and we definitely have yet to regain it. But alas, Spring is just around the corner! Our phone is starting to ring, as it tends to this time of year. But we are anticipating a lot of volatility in the local, state, and national real estate markets. It's going to be a very difficult market to predict, but one thing is certain: it's still a tight-inventory market.
What does that mean? Well it means that there are no imminent price corrections and we're technically still in a Seller's Market. So if you're thinking now's the time to discover a deal, I'd recommend not getting too excited. While there are fewer multiple offer situations, they haven't disappeared entirely. Rural properties are especially hard to come by. Days-on-market is still historically low. While certain properties are bound to go quickly, others will spend some more time on the market this year. The super-crazy market activity is lessened of late, but many buyers are still looking for a home and will see this all as an opportunity to actually land the right home!
All of the stats that follow are sourced from the Lawrence MLS. What follows is a look at some numbers through the month of January 2023 within the city limits of Lawrence:
- January home sales declined by 7 from the previous month (43 vs 50)
- Average price dropped 3.5% to $323K in January vs. the previous month; Median sales price dropped 3.5% to $276K
- Median Days-on-Market rose from 6 in homes closed in December to 10 days for homes closed in January
- 51 homes were listed in January, a decrease from 53 listed in December
- List-Price-to-Sales-Price Ratio for January was 99.0%
- Home sales were down 25% in January '23 vs January '22, a drop of 15 homes sold in the month
- Average Price is up YoY by 11% at $323K; Median was up only 1.8% to from January '22 to $276K
- Dollar Volume was down 18% vs January '22 for a total of $13.9M in the month
- List-Price-to-Sales-Price Ratio increased to 99% in January '23 from 97% a year ago
- The 51 homes listed last month was a decrease from 64 listed in January last year
- There are 65 "Active" properties in Lawrence as of this writing
- There are 57 properties currently listed as "Under Contract"
So far, we're trending to decrease in overall sales this year and we've only made it one month into 2023. While it's too early to draw any conclusions, my prediction is that we'll sell under 1,000 homes inside the city limits this year. Time will tell if that happens, or what exactly the Spring Market is going to deliver. From my perspective, things are extremely difficult to predict right now.
Part of that prediction hinges on what the Fed does with rates. I hear from most that the rates will top out and then fall. I'm less confident in this prediction. I personally expect rates to fall slightly, rise again, and then fall back to where they are now (in the low 6's). My most optimistic hope is that they fall to the mid 5's. 4.5-5.5% is actually a very healthy range and I expect that buyers will acclimate. The trouble will be getting home owners with rates in the 2's and 3's to sell. Couple that with continued low inventory, and the market remains tight for the time-being. In a market this tricky, best thing to do is have a good REALTOR who understands which way the wind is blowing at any given moment!
Stay tuned to R+K Real Estate for great new content, updates, advice, opinions and more in 2022. We plan to continue our advance of transparency, consumer advocacy, and empowering our clients with alternate business models designed to provide high levels or real estate service with drastically reduced commissions!
-Ryan Desch, Broker/Owner R+K Real Estate Solutions