The housing market decelerated throughout 2022, creating more opportunities for buyers — in stark contrast to the frenzied seller's market of the previous year, RE/MAX said Wednesday.
The nationwide real estate brokerage released its National Housing Report for December and all of 2022, stating that December produced the year’s “most telling stats” — home sales were down 38% from a year ago, while the number of homes for sale was up 69% in the 53 metro areas covered by the report.
Sales fell below the previous year in every month of 2022, the report notes, with the percentage decline starting out in single digits during the first quarter before topping 30% in the fourth quarter.
The national median sales price of $385,000 was 1.3% higher year over year in December, compared to 13.9% higher year over year in January 2022.
"The past three years have each had a unique context — and 2022's included quickly rising interest rates and the difficult year-over-year comparisons to the extremes of 2021. Ultimately, though, it was a fairly good year for home sales by historical standards," said Nick Bailey, RE/MAX president & CEO.
"Looking forward into 2023,” he continued, “the higher-interest rate environment clearly poses some challenges — but as buyers, sellers, and agents recalibrate their expectations, sales will continue to occur. Demand hasn't gone away. The question is which real estate professionals have the skills, experience, resources, and adaptability to provide the guidance consumers will continue to need.”
Bailey said his company believes that the ongoing rebalancing of the market is “actually a good thing. It's putting buyers and sellers on more equal footing, which is refreshing after so many years of sellers having the upper hand. Sellers still have a strong position, but buyers are gaining more power in what's likely one of the largest financial transactions of their lives.”
With mortgage rates and home prices appearing to stabilize, he added, “and with the dramatic increase we've seen in the number of homes for sale, both buyers and sellers have reason to be optimistic as we head into the new year."
Mark Wolfe, broker/owner of RE/MAX DFW Associates in Coppell, Texas, said he expects the market to continue to improve. "We saw the beginning of some stabilization at the end of 2022, and I am hopeful we are reaching a normal market," he said.
As in October and November, the average close-to-list price ratio in December was 98%, meaning that homes sold, on average, for 2% less than the asking price. The ratio peaked at 103% in April and May, compared to 100% in December 2021.
December 2022 inventory was down 12.2% from November, but grew month-to-month in six of the last nine months, RE/MAX said..
Other notable metrics:
- New listings recorded 2022's largest month-to-month decline of 25.2% and finished 15.1% lower than a year ago.
- Homes sold in December were on the market for an average of 47 days, 10 more than a year ago.\
- December's 2.5-months supply of inventory was unchanged from November, but more than double the 1.2 months of a year earlier.
Highlights and local market metrics for December:
- New Listings: Of the 53 metro areas surveyed in December 2022, the number of newly listed homes is down 25.2% compared to November 2022, and down 15.1% compared to December 2021. The markets with the biggest decrease in year-over-year new listings percentage were Des Moines, Iowa, at -43.6%; Phoenix at -39.7%, and Los Angeles at -38.6%. Leading the year-over-year new listings percentage increase were Trenton, N.J., at 44.2%; Philadelphia at +39.9%; and Dover, Del., at 38.3%.
- Closed Transactions: Of the 53 metro areas surveyed in December, the overall number of home sales was down 1.4% from November, and down 38.2% compared to December 2021. The markets with the biggest decrease in year-over-year sales percentage were Las Vegas at -52.3%; Anchorage, Alaska, at -49.5%; and Dover at -48.9%. No metro area had a year-over-year sales percentage increase in December.
- Close-to-List Price Ratio: In December, the average close-to-list price ratio of all 53 metro areas in the report was 98%, flat compared to November but down from 100% compared to December 2021. The metro areas with the lowest close-to-list price ratio were New Orleans at 94%; Miami at 95%; and Coeur d'Alene, Idaho, at 96%. The highest close-to-list price ratios were Burlington, Vt. at 103% and Hartford, Conn. at 101%.
The close-to-list price ratio is calculated by the average value of the sales price divided by the list price for each transaction. When the number is above 100%, the home closed for more than the list price. If it's less than 100%, the home sold for less than the list price.
The RE/MAX National Housing Report is based on MLS data for the stated month in 53 metropolitan areas, includes single-family residential property types, and is not annualized. Most of the largest metro areas in the country are represented, and an attempt is made to include at least one metro area in almost every state. Metro areas are defined by the Core Based Statistical Areas (CBSAs) established by the U.S. Office of Management and Budget.
RE/MAX LLC is a subsidiary of RE/MAX Holdings, with more than 140,000 agents in almost 9,000 offices and a presence in more than 110 countries and territories.
