A lot of things are different in 2023, including the traditionally hot housing markets. Los Angeles, New York and San Francisco are no longer atop the “hottest housing markets” list.
According to recent data from Realtor.com, the hottest markets have shifted into a whole new category – suburbia. Suburban communities are leading with home sales over urban markets. Places like Manchester-Nashua, New Hampshire; Rochester, New York and Columbus, Ohio, were among the top-ranked suburban cities. These cities saw fewer days on market than many other cities and relatively stable prices.
Homes in Manchester-Nashua were selling in less than 51 days — eighteen days slower than a year ago, but three weeks faster than the rest of the United States. Properties there attracted three times as many visitors per property than similar homes around the country.
“The current supply of homes for sale is still very low,” said full-time Chicago-area residential real estate developer Bill Samuel of Blue Ladder Development. “Roughly 58% less than pre-pandemic levels.”
According to Samuel, the amount of available housing stock is moving in the right direction. “While available inventory is still low, historically, comparing annual levels over the past 10 years, it is slightly higher than it was at the start of 2021.”
Las Vegas market sees fewer homes changing hands.
Currently, Las Vegas real estate professionals are seeing more homes available on the market, with fewer homes changing hands than they saw one year ago. Will this trend continue for Las Vegas so that its homeowners will again be victims of reduced home prices like they were in the Great Financial Crisis?
The local association of Realtors® reported that existing single-family homes in Southern Nevada were selling at $424,995 in February. That’s almost the same selling price as January 2023, but down 5.6% from $450,000 in February 2022. It is down considerably from the all-time record price of $482,000 in May 2022.
“The local housing market is much more balanced now than it has been in recent years,” said 2023 Las Vegas Realtors® President Lee Barrett. “Instead of sellers having the advantage, buyers are now in a better position since prices have stabilized and we have more homes on the market. We’ve now seen two straight months of stable home prices. It was also encouraging to see sales increase from January to February, while the number of new listings continue to decline. Even with mortgage interest rates reaching 7% recently, this shows a strong underlying interest in owning a home here in Southern Nevada.”
Southern California home sales fell in January to the lowest level in almost four years.
When it comes to home sales, everyone always thinks of markets in California as the hottest around. Apparently, not right now and, no, you didn’t misread that sub-headline (the lowest level in almost four years)! The Southern California region’s housing slump continued through January, data from CoreLogic indicates that home sales are down 43% and prices have fallen below year-ago levels for the first time in nearly four years. According to CoreLogic Chief Economist Selma Hepp, “Southern California housing markets continue to be challenged by high mortgage rates and eroded affordability,” she said. “The challenge is further exacerbated by a standoff between buyers and sellers, with buyers expecting better deals and sellers still expecting to receive last year’s prices.”
To Happ’s point, the “seller’s market” may be shifting to a “buyer’s market.” During the pandemic period, the seller made all the decisions and demanded high prices. Now, buyers are asking for concessions — and getting them!
“We are seeing some sellers giving more concessions than we’ve seen in the recent past and there’s more willingness to negotiate,” said Douglas Elliman Executive Director of Luxury Sales Bonnie Heatzig, who believes it’s still a seller’s market. “Our market does appear to be changing but the pendulum has not swung all the way yet.”
The measure of “days on market” is up sharply from a year ago – Whether you’re selling in the city or in suburbia.
Homes are taking longer to sell overall. In January, homes stayed on the market for a median of 41 days before getting a contract. That’s up 173% from the 15 days it took to arrive at a contract in January 2022. When money is harder to borrow and more expensive to pay back, lenders are not the only ones being more discerning: buyers are too!
There is still a lot of debate about who has the upper hand, the buyer or the seller, but experts in some markets are seeing signs that relief might be on the way — but will it come in time for the traditionally hotter spring / summer-buying seasons?
The trend to hot housing markets in suburbia may not last, but for the time being, it appears the traditionally hot urban markets have cooled off.
Watch for more blogs on the hot and cold housing markets that are popping up around the country in 2023.