HousingWire
By Mike Simonsen
As inflation and mortgage interest rates ease down this December, the ice cold real estate market of the fall seems to be thawing just a bit. Available inventory of homes on the market is declining faster that we expected — implying slightly more purchases than we expected. At the end of the year inventory always declines of course, but the last two weeks have come in with bigger declines than expected.
If you continue to assume that buyers aren’t buying, then you’d also assume that inventory would decline less than normal in December. But inventory is declining faster than I expected. You could interpret this as good news, or maybe as less dramatically bad news. The market opens up a bit as rates ease back down.
I’ve mentioned that the second-and-third week of January is when we’ll see more meaningful signals for how the 2023 real estate year will look. The thing to keep in mind right now, is these are just a couple data points. They’re pointing a little better. They’re not pointing to the market tanking from here.
The median price of single family homes in the US ticked down to $410,000. That’s down 1.2% this week, which is precisely what’s expected for the third week of December. Home prices will end the year right around $400k. That’ll mean we end the year with 10% home price growth across the country, even though many local markets are way off their peak of pricing. Nationally home prices are still up significantly from last year.
A true data geek, Mike founded Altos Research in 2006 to bring previously unavailable insights on the US housing market to those who need it. The company now serves the largest Wall Street investment firms, banks, and tens of thousands of real estate professionals around the country. During the pandemic, Mike used Altos Research data to identify trends in the real estate market well before the headlines, and his work was recently featured in the New York Times, The Atlantic and other publications. Mike was also the 2020 president of the San Francisco Chapter of the Entrepreneurs’ Organization, a group in which he gets to lead and learn from hundreds of the most exciting entrepreneurs in the world.