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Dutchess County January, 2023 v. January, 2022 closed sales are down 30.6%, per Mid-Hudson multiple listing service. The market has seen sales down during Covid due to decreased inventory. However, while still nearly 50% below preCovid inventory levels of January, 2020, inventory was up 31.3% January 2023 v. January 2022, per Mid-Hudson MLS ("MHMLS".)
Up in inventory yet down in sales by nearly equal measure is a funky space. Initial signs of adjustment? Perhaps. Overpriced and ineffectively marketed listings tend to sit on the market (a/k/a "sitters") awaiting reduction or ultimately expire (do not sell during the term of the listing agreement.)
How much are those sitting homes contributing to "increased inventory?" The quandary with those sitters is they count as "active and available" inventory, yet sit on the shelf as buyers are deterred from overpriced listings and thereby those sitters contribute to both increased inventory and decreased sales. An adjustment is already in motion, but I predict there could also be confusion in the days ahead between what should be attributed to adjustment versus overpricing.
Realtor.com in a February 2, 2023 pep talk article to buyers entitled "2023 Housing Market is Looking Up: 3 Things That Should Give Homebuyers Real Hope," noted the "deluge" and a "glut" of inventory that has recently hit the market. That appears the case in other areas of the country, with Tennessee cited as an example in the same article, up 304.2% in inventory year over year. The Hudson Valley still has a way to go to just break even with preCovid inventory levels. With 70% of homeowners enjoying interest rates of 4% or less per ATTOM Data, the addition of enough inventory to make a market difference is dicey near term with many sellers opting to stay put with more favorable interest rates.
We are currently holding in an overall sellers market due to continued low supply/high demand in many price points. Spring Market is poised to be bustling based on current climate so long as we have inventory to sell and interest rates cooperate. It is always imperative to keep a solid pulse on the market for clients with the days ahead absolutely crucial in order to provide expert client counsel to both buyers and sellers.
Realtor expertise and demand for the particular properties they represent can vary widely. For those reasons, I fully expect the days ahead will see continued expired listings and price reductions while certain other properties enjoy multiple offers and/or swift sales. I expect a mix in the days ahead that will likely also sprinkle in increased seller concessions. With conventional mortgaged buyers struggling just to compete against cash, concessions were unheard of during the height of Covid frenzy.
To share preCovid trending for perspective on the current inventory situation, in January, 2020 (preCovid,) there were 898 listings available on the market in Dutchess County, per MHMLS. That was nearly 50% more than 441 available as of January, 2023. Inventory is still tight with well packaged (read: solidly priced and effectively marketed) properties realizing swift sales. Average days on market in Dutchess County decreased 11.8% from 85 to 75 days January 2023 v. January 2022, per Mid-Hudson multiple listing service, further demonstrating the hungry buyer market that continues to exist.
According to the Mortgage Bankers Association, loan originations took a hard 55% tumble in October, 2022. The first three weeks of January, 2023 saw a noticeable increase in loan originations, but the week of January 27 took another punch with a down of 9% from week prior, per mortgage industry news source Housing Wire. The demand for purchase loans decreased by 10% during the same period. This is regardless of lowered interest rates.
We remain in a volatile market with the National Association of Realtors sharing some encouraging words: “It seems we have already reached the bottom of the low home sales activity,” says Nadia Evangelou, senior economist and director of forecasting for the NAR. “And with mortgage rates stabilizing near 6%, we expect the housing market to turn around in 2023 … and rebound in 2024.” As far as really being fully in the rear view mirror, I'm more inclined to say 2025, but I would take 2024 for certain.
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