Is The Housing Market Going To Crash

The thought a couple of years ago was that the market was on the proverbial edge of a cliff, and we were looking into the abyss to see whether the skyrocketing rise in home prices would end with a crash or, at the very least, be witness to a strong correction. Yet, today, we can safely take a few steps back. Our market stabilized, prices remained steady, supply is still reasonable, and with the predictions of much lower interest rates, 2024 should be a good year.  So, HAPPY NEW YEAR!

A developing concern was active inventory setting record highs for each of the last four months. However, this changed in December, dropping 13% to end the year at (309). It’s still high, yet rewarding to see the upward trend broken. Of the total, (259) were New Homes, which was down 6%. However, the Resale inventory dropped a dramatic 30% to just (67).  So, a good start to the New Year!

RESALES: ​

Although the Average Sales Price declined in December, the more important trend is the Average Price Per Square Foot. That’s because if more million-dollar homes are sold, it distorts the Sales Price upwards. Meanwhile, the price per square foot is more constant across all price ranges. The total number of homes SOLD dropped, yet it is normal for December. I am most pleased to see the “Months of Supply” decrease because the amount of supply affects the Sales Price. In short, it is a good way to end the year.

NEW HOMES:  ​

Where the Resales results are more volatile, the New Home witnessed little change. The biggest difference was that the Average Sales Price dropped about 4.5% in December. However, as indicated above, this is mainly because they are building lower-priced homes, which obviously lowers the average Sales Price. However, you’ll notice the Average Price Per Square Foot actually increased. This means they are building smaller homes, yet the cost to build is higher.