Decelerating Housing Market Creates Opportunities for Homebuyers

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  • In December 2022, the housing market decelerated significantly from 2021’s frenzied seller’s market, with home sales down 38% and homes for sale up 69%.
  • The Median Sales Price of $385,000 was 1.3% higher year over year in December compared to 13.9% higher last January.
  • New listings recorded a 25.2% month-to-month decline and finished 15.1% lower than a year ago while closed transactions were down 38%, with no metro area having an increase in sales percentage compared to one year ago.
  • The average Close-to-List Price Ratio was 98%, flat compared to November 2022 but down from 100%.
  • Homes sold in December were on the market for an average of 47 days – 10 more days than one year ago – resulting in 2 months’ supply of inventory that is double what it was at this time last year.

The housing market decelerated throughout 2022 creating more opportunities for homebuyers, in stark reversal of the frenzied seller’s market of the previous year, according to the RE/MAX® National Housing Report for December 2022. The year’s most telling stats were punctuated in December: Home sales were down 38% from a year ago while the number of homes for sale was up 69% in the report’s 53 metro areas.

Sales in every month of 2022 fell short of the previous year, with the percentage of decline starting out in single digits during the first quarter before topping 30% in the fourth quarter. The Median Sales Price of $385,000 was 1.3% higher year over year in December, compared to 13.9% higher year over year last January.

“The past three years have each had a unique context – and 2022’s included quickly rising interest rates and the difficult year-over-year comparisons to the extremes of 2021. Ultimately, though, it was a fairly good year for home sales by historical standards,” said Nick Bailey, RE/MAX President and CEO. “Looking forward into 2023, the higher-interest rate environment clearly poses some challenges – but as buyers, sellers and agents recalibrate their expectations, sales will continue to occur. Demand hasn’t gone away. The question is which real estate professionals have the skills, experience, resources and adaptability to provide the guidance consumers will continue to need.

“As strong believers in the advantages of homeownership, we think the ongoing market rebalance is actually a good thing. It’s putting buyers and sellers on more equal footing, which is refreshing after so many years of sellers having the upper hand. Sellers still have a strong position, but buyers are gaining more power in what’s likely one of the largest financial transactions of their lives. With mortgage rates and home prices appearing to stabilize, and with the dramatic increase we’ve seen in the number of homes for sale, both buyers and sellers have reason to be optimistic as we head into the new year.”

READ:  Local Home Sales Down by 17% in 2022, Are Interest Rates to Blame?

Mark Wolfe, Broker/Owner of RE/MAX DFW Associates in Coppell, TX expects the market to continue to improve over time.

“We saw the beginning of some stabilization at the end of 2022, and I am hopeful we are reaching a normal market.”

As in October and November, the average Close-to-List Price Ratio in December was 98%, meaning that homes sold, on average, for 2% less than the asking price. The ratio peaked at 103% in April and May compared to 100% in December 2021.

December inventory was down 12.2% from November but grew month-to-month in six of the last nine months.

Other notable metrics include:

  • New listings recorded 2022’s largest month-to-month decline of 25.2% and finished 15.1% lower than a year ago.
  • Homes sold in December were on the market for an average of 47 days. That was 10 more days than one year ago.
  • December’s 2.5 months supply of inventory was unchanged from November but more than double the 1.2 of one year ago.

Highlights and local market metrics for December include:

New Listings 
Of the 53 metro areas surveyed in December 2022, the number of newly listed homes is down 25.2% compared to November 2022, and down 15.1% compared to December 2021. The markets with the biggest decrease in year-over-year new listings percentage were Des Moines, IA at -43.6%, Phoenix, AZ at -39.7%, and Los Angeles, CA at -38.6%. Leading the year-over-year new listings percentage increase were Trenton, NJ at +44.2%, Philadelphia, PA at +39.9%, and Dover, DE at +38.3%.

New Listings:

5 Markets with the Biggest YoY Decrease

Market

Dec 2022

New Listings

Dec 2021

New Listings

Year-over-
Year %
Change

Des Moines, IA 494 876 -43.6 %
Phoenix, AZ 4,431 7,343 -39.7 %
Los Angeles, CA 3,540 5,768 -38.6 %
Portland, OR 1,387 2,240 -38.1 %
San Diego, CA

1,337

2,133

-37.3 %

Closed Transactions 
Of the 53 metro areas surveyed in December 2022, the overall number of home sales is down 1.4% compared to November 2022, and down 38.2% compared to December 2021. The markets with the biggest decrease in year-over-year sales percentage were Las Vegas, NV at -52.3%, Anchorage, AK at -49.5%, and Dover, DE at -48.9%. No metro area had a year-over-year sales percentage increase in December.

Closed Transactions:

5 Markets with the Biggest YoY Decrease

Market

Dec 2022
Transactions

Dec 2021

Transactions

Year-over-
Year %
Change

Las Vegas, NV 1,955 4,099 -52.3 %
Anchorage, AK 347 687 -49.5 %
Dover, DE 162 317 -48.9 %
Coeur d’Alene, ID 179 350 -48.9 %
Salt Lake City, UT

854

1,668

-48.8 %

READ:  New Residential Sales Statistics for December 2022
Median Sales Price – Median of 53 metro area prices
In December 2022, the median of all 53 metro area sales prices was $385,000, down 2.3% compared to November 2022, and up 1.3% from December 2021. The markets with the biggest year-over-year decrease in median sales price were San Francisco, CA at -5.1%, Los Angeles, CA at -4.7%, and Honolulu, HI at -4.3%. Four metro areas increased year-over-year by double-digit percentages, Manchester, NH at +17.7%, Fayetteville, AR at +12.3%, Indianapolis, IN at +11.8%, and Omaha, NE at +10.2%.

Median Sales Price:

5 Markets with the Biggest YoY Decrease

Market

Dec 2022

Median Sales
Price

Dec 2021

Median Sales
Price

Year-over-
Year %
Change

San Francisco, CA $985,929 $1,038,444 -5.1 %
Los Angeles, CA $810,000 $850,000 -4.7 %
Honolulu, HI $670,000 $700,000 -4.3 %
Seattle, WA $629,975 $655,000 -3.8 %
Phoenix, AZ

$415,000

$430,000

-3.5 %

Close-to-List Price Ratio – Average of 53 metro area prices
In December 2022, the average close-to-list price ratio of all 53 metro areas in the report was 98%, flat compared to November 2022, and down from 100% compared to December 2021. The close-to-list price ratio is calculated by the average value of the sales price divided by the list price for each transaction. When the number is above 100%, the home closed for more than the list price. If it’s less than 100%, the home sold for less than the list price. The metro areas with the lowest close-to-list price ratio were New Orleans, LA at 94%, Miami, FL at 95%, and Coeur d’Alene at 96%. The highest close-to-list price ratios were Burlington, VT at 103% and Hartford, CT at 101%.

Close-to-List Price Ratio:

5 Markets with the Biggest YoY Decrease

Market

Dec 2022

Close-to-List
Price Ratio

Dec 2021

Close-to-List
Price Ratio

Year-over-
Year
Difference

San Francisco, CA

99.1 %

107.0 %

-7.9 pp

Seattle, WA

97.3 %

104.0 %

-6.7 pp

Raleigh, NC

98.4 %

102.7 %

-4.3 pp

Los Angeles, CA

96.9 %

100.9 %

-4.0 pp

New Orleans, LA

94.2 %

97.8 %

-3.6 pp

Days on Market – Average of 53 metro areas
The average days on market for homes sold in December 2022 was 47, up eight days from the average in November 2022, and up 10 days from the average in December 2021. The metro areas with the lowest days on market were Baltimore, MD at 19, Philadelphia, PA at 21, followed by a three-way tie between Dover, DE, Trenton, NJ, and Washington, DC at 22. The highest days on market averages were in Fayetteville, AR at 77, Bozeman, MT at 75, and Seattle, WA at 72. Days on market is the number of days between when a home is first listed in an MLS and a sales contract is signed.
READ:  New Residential Sales Statistics for December 2022

Days on Market:

5 Markets with the Biggest YoY Increase

Market

Dec 2022

Days on Market

Dec 2021

Days on Market

Year-over-
Year %
Change

Tampa, FL 55 20 +172.9 %
Orlando, FL 63 24 +161.1 %
Bozeman, MT 75 31 +142.5 %
Salt Lake City, UT 60 28 +113.9 %
Denver, CO

44

21

+111.3 %

Months’ Supply of Inventory – Average of 53 metro areas
The number of homes for sale in December 2022 was down 12.2% from November 2022 and up 69.0% from December 2021. Based on the rate of home sales in December 2022, the months’ supply of inventory was flat at 2.5 compared to November 2022, and increased compared to 1.2 in December 2021. In December 2022, the markets with the lowest months’ supply of inventory were a tie between Albuquerque, NM and Trenton, NJ at 1.0, followed by a five-way tie between Baltimore, MD, Hartford, CT, Manchester, NH, Seattle, WA, and Washington, DC at 1.2.

Months’ Supply of Inventory:

5 Markets with the Biggest YoY Increase

Market

Dec 2022

Months’ Supply
of Inventory

Dec 2021

Months’ Supply
of Inventory

Year-over-
Year %
Change

Salt Lake City, UT 3.3 0.5 +532.3 %
Raleigh, NC 3.2 0.5 +530.0 %
Bozeman, MT 6.1 1.2 +395.2 %
Nashville, TN 2.9 0.6 +377.1 %
Las Vegas, NV

4.4

1.0

+363.7 %

Report Details
Beginning with the April 2022 report, RE/MAX is using a new source for aggregated data.

The RE/MAX National Housing Report is distributed monthly on or about the 15th. The Report is based on MLS data for the stated month in 53 metropolitan areas, includes single-family residential property types, and is not annualized. For maximum representation, most of the largest metro areas in the country are represented, and an attempt is made to include at least one metro area in almost every state. Metro areas are defined by the Core Based Statistical Areas (CBSAs) established by the U.S. Office of Management and Budget.

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