Welcome to the 2nd quarter 2023 edition of Market Talk!
My goal is to walk through what’s happening in the market, and bring some clarity to those of you who are making real estate decisions this Spring and Summer.
The 4th quarter of 2022 saw a sharp rise in interest rates which cooled the frenzied housing market considerably. This was the result of the Fed’s rapid hikes to the federal funds rate in the final months of last year in an effort to halt inflation.
Rates doubled, which translated to a 38% increase in a typical monthly payment for a home buyer, which in turn caused a large number of buyers to put the brakes on their home searches.
As a result, we began 2023 with a much different temperature in the market than most of last year. The buyers who remained in the market in January were skittish, and frustrated by the rapid rate acceleration.
For the first time since before the pandemic, we began to see buyers offering less than asking price, and in some cases even getting seller concessions. Home inspections and appraisals became the
norm again, and buyers found themselves in a better bargaining position to ask sellers to make repairs than they had been in a long time.
Richmond:
In February in our Richmond office, offers accepted for less than asking or at asking price were 62% of the market, while bidding wars were only happening on approximately 38% of the listings.
Just as buyers were beginning to feel that the market pendulum was swinging back to their favor, things heated up again in March. We saw a sharp rise in multiple offers as it became clear that the number of buyers was still outpacing the inventory.
By the time our March report was published, offers over the asking price had increased to 50% of all sales!
Peninsula:
In February in our Peninsula office, for example, offers accepted for less than asking or at asking price were 59% of the market, while bidding wars were only happening on approximately 39% of the listings.
Just as buyers were beginning to feel that the market pendulum was swinging back to their favor, things heated up again in March. We saw a sharp rise in multiple offers as it became clear that the number of buyers was still outpacing the inventory.
By the time our March report was published, offers over the asking price dipped just a bit to 36%.
Williamsburg
In February in our Williamsburg office, for example, offers accepted less than asking price climbed to over 50% of the market, while bidding wars were only happening on approximately 25% of the listings.
Just as buyers were beginning to feel that the market pendulum was swinging back to their favor, things heated up again in March. We saw a sharp rise in multiple offers as it became clear that the number of buyers was still outpacing the inventory.
By the time our March report was published, offers over the asking price doubled in 30 days, representing 50% of all sales.
Northern Neck
By the time our March report was published, offers over the asking price dipped just a bit to 36%.
It seems that the market is delivering mixed signals right now, but I believe what is really happening is that there are several different markets colliding at the same time:
• For listings that are well priced and in good condition, there are still fewer homes available than there are buyers who need or want to move, and so that segment of the market is still pretty “hot,” with multiple offers and sellers enjoying the upper hand.
• For those sellers who have jumped into the market at the last minute (fearing that they’ve missed the gravy train of 2021 and early 2022, and accordingly pushing the envelope with unrealistic prices), they are experiencing a longer time on the market, and weary buyers pushing back with lower offers containing normal contingencies.
Markets are also experiencing different activity levels based on price point and location, which can seem confusing. Now, more than ever, it’s important to have a seasoned agent advising you on negotiating strategies whether you’re a buyer or a seller (or both).
Thinking about making a move? Let us guide you through these market conditions!