Let's Look at the Data!

As we turned the corner into 2023, we saw the effects of the Fed’s policy direction doing its job by slowing inflation in the real estate market. Higher interest rates took some buyers out of the market as properties were becoming less affordable with each rate increase. We also saw property owners very content to stay put in their homes and not trade their great interest rates for new loans in the higher 6–7% range, and I don't blame them one bit!

In the first few months of 2023, we saw signs of inventory levels growing, and as we started Q2, we had several weeks of increased inventory versus the same period of time in 2022. It seemed we were moving on to having more inventory and pricing closer to 2022's, but like New England weather, change was in the air: in mid-May to the end of June, inventory stopped outpacing 2022, and buyer activity continued to ramp up in our markets.

There have been some markets in the nation that have experienced median and average price declines compared to 2022, but here in Massachusetts, as a whole, we’ve continued to see prices climb for single-family homes. Single-family median sales price was up 2.07%, and average sales price was up 1.46% in the 2nd quarter of 2023. It seems buyers are now over the rate-adjustment phase and are looking strongly to enter the market again. I am hearing reports of multiple offers coming back more regularly and listings days to offer (DTO) declining once again. Single-family sale-to-list price ratio is at 102.63, which means sellers are still seeing competition for their homes.

I believe the two most important stats to know in your local community are DTO and sale-to-list price ratio. These two figures will tell you how hot your local market is, and you can zero in on price points that are seeing the most competition. Using these data points along with comparable sales data will help you price accurately in this low-inventory market. You can easily find these data points for your local market in the Total Sold Market Statistics report available from Market Reports in the Tools section of Pinergy.

The Fed has just raised interest rates by a quarter of a percentage point. I think it's safe to say that the heavy lifting has been done and that small increments like this latest one are meant to help control inflation. It will be interesting to see what effect the recent rate increase may have on our markets.