The Spring Market is right around the corner! How are things shaping up so far in 2023? It's a mixed-bag for sure! Prices are up, sales are down. Rates are up, listings are down. Time on market is up, multiple offer situations are down (but not gone!).
Through it all, are we seeing signs of a crash? The short answer is clearly no. But there's plenty to be concerned about for both buyers and sellers. Inventory is tight and that same old story is going to keep driving market trends as we move further into the year!
Prices have increased from the same time last year. New listings are way down and therefore total market volume is way down, year to date. With so few new listings hitting the market, the inventory situation that's been the story for at least the past few years continues to make the headlines. Some headlines would have you believe there's a housing crash underway. Ignore these people! Instead, let's take a look at the data.
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:
- February home sales declined by 8 from the previous month (35 vs 43)
- Average price remained mostly flat at $325K in February vs. the previous month; Median sales price jumped 18% to $326K
- Median Days-on-Market rose from 10 in homes closed in January to 12 days for homes closed in February
- 59 homes were listed in February, an increase from 53 listed in January
- List-Price-to-Sales-Price Ratio for January was 98.77% in February
- Home sales were down 47% in February '23 vs February '22, a drop of 31 homes sold in the month last year (!)
- Average Price is up YoY by 6% at $325K; Median was up 19%% to from February '22 to $326K
- Dollar Volume was down 43% vs February '22 for a total of $11.4M in the month
- List-Price-to-Sales-Price Ratio decreased to 98.77% in February '23 from 100.45% a year ago
- The 59 homes listed last month was a decrease from 97 listed in February last year
- Home sales are down 37% for the year through February (78 vs 124)
- Average price so far in 2023 is up 8.4% to $324,000 vs the same period last year
- Median Price is up 7.3% to $293,000
- Median DOM is up to 11 vs 5 a year ago through February
- Total Homes Listed this year totals 112; a decline of 30.4% through February '22
- Total Dollar Volume in 2023 is down 32%; At the end of Feb last year the Lawrence market totaled $37M and so far this year we're sitting at $25.2M
- There are 62 "Active" properties in Lawrence as of this writing
- There are 79 properties currently listed as "Under Contract." This is an increase of 38% since my last market update
The difference between today and the Great Recession is that we are in an entirely different economy. Job growth continues and jobless rates remain low. The percentage of home owners in trouble on their mortgage is incredibly low. The tragedy of sub-prime lending is nowhere to be found today. Inflation is high, but there's an argument to be made that real estate is a safe-bet during inflationary times. The market today is is simple calculation of supply & demand. As long as the supply is low, the market isn't going to crash.
That doesn't mean there aren't problems. Rising rates coupled with rising values creates a difficult path forward for home buyers. Many have been taken out of the market. And home owners who bought or refinanced at rates in the 2's and 3's are unlikely to be motivated to sell anytime soon. That alone will continue to keep the market inventory tight in the years to come. But the buyers who remain in the market these days are dead-serious and those that understand the current market will be able to find success this year!
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