In order to better understand the current Real Estate situation, we need to go after data from the major indicators of the industry. 2023 has been a wild ride for home owners and the fed recent announcements might not solve the mid-long terms real issues. Let’s go over some major key performance indicators of the industry in the second quarter of 2023:
Home Sales Continue to Decline:
The housing market continues to experience a downward trend in home sales, with a year-over-year decrease of 23.2% since April 2022. This decline has been consistent for over a year, indicating a challenging environment for prospective buyers.
Supply of New Construction Homes:
If you’re in the market for a newly constructed home, the supply has slightly decreased. Last year, there was an inventory equivalent to 8.4 months of supply, whereas now it stands at 7.6 months. However, for all other sales, the total inventory at the end of April saw a 7.2% increase from March and a 1% increase from the previous year.
Fluctuating Home Prices:
According to The Wall Street Journal, the national median home price experienced a significant decline of 1.7% in April, reaching $388,800. This drop marks the largest decline since January 2012. Black Knight Research notes that the housing market is divided, with the West Coast witnessing a 10% decrease in home prices and the East Coast observing a 10% increase.
Notably, Black Knight Research highlights that 14 out of the 50 largest US markets have seen home prices fall by 6% or more. The top five markets with significant declines include Austin, Texas, with a 13.6% decrease since March 2022, followed by Seattle, Washington (-9.5%), San Francisco (-8.9%), Pittsburgh, Pennsylvania (-5.4%), and New York (-2.2%).
States Experiencing Rapid Price Decline:
In terms of states witnessing the most substantial decline in home prices, Nevada leads the way with a 4.8% decrease, followed by Arizona, California, Utah, Idaho, Washington, D.C., Colorado, Oregon, Washington, and Massachusetts. In fact, home prices have fallen in 31% of the United States, marking the highest decline in the past decade.
Promising Markets and Rising Prices:
It’s important to note that not all housing markets are following the same trajectory, and some locations are experiencing price increases. For instance, Myrtle Beach, South Carolina, has seen a significant rise of 15.4% in home prices, while Fayetteville, North Carolina, is up 14.7%. Other areas with notable increases include Fort Lauderdale, St. Louis, Hollywood (FL), Boca Raton, Cleveland, and Clearwater, all of which have experienced at least a 10% rise in home prices.
Diverse Market Conditions and Homebuilder Confidence:
These fluctuations in the housing market indicate that while certain regions are facing price declines, others are thriving, supported by relatively low inventory. This dynamic has contributed to a boost in homebuilder confidence, which has reached its highest level since 2022. However, it is crucial to recognize that the housing market’s performance varies across different locations, and careful consideration is necessary when evaluating market conditions.
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