First 90 Days Update: Over the Mountain Volume is Down, Prices Up
The Over the Mountain real estate market is sending mixed signals, but by historical standards it's still a Seller's market. Sales volume is down 27%. Prices are up 7.8% and Days on Market increased from 3 days during the first 3 months of last year to 4 days, this year.
First 90 Days of 2022
950 homes sold with median days on the market of 3
Average list-to-sales price 101.8%
Average sold price $492,553
First 90 days of 2023
690 homes sold with median days on the market of 5
Average list-to-sales price 99.96%
Average sold price $531,084
During the first 90 days of 2022, 260 more over-the-mountain homes were sold than during the first 90 days of this year. That's a 27% drop in unit volume for this year. That's a slight improvement over the decline of 29% for the first 60 days. However, the average sales price for homes sold this year was 7.8% higher than during the same period last year. The median days on the market increased by 1 day to 4. Still, extremely fast by historical standards.
The increase in average sales prices during the first 90 days and the still very attractive (although longer) median days on the market are indicators of a healthy market.
But why have prices increased at the same time that sales volume has decreased? Hayden and I believe that the increase in interest rates is primarily to blame for these seemingly contradictory statistics. Sometimes prices rise because the average cost of all homes is going up. Other times, average prices appear to go up due to an increase in the percentage of more expensive homes selling. With rates rising, more buyers are paying cash, and cash buyers tend to buy more expensive homes. The stats confirm our theory. During the first 90 days of 2022, about 34.3% of homes sold for more than $500,000. This year that number increased to about 41%. Based on that, the actual rate of home price appreciation is likely lower than the 7.8% increase derived from comparing overall average sales prices from the two periods.
What does the decrease in the List-to-Sales price ratios tell us? This year's 99.96% list-to-sales price ratio, while lower than last year (101.8%), is still good. The decline shows that the market during the first 90 days of this year wasn't as frothy as the previous year. But, the list-to-sales price, so far this year, is still at historically healthy levels. It could also be a sign that sellers need to slightly recalibrate their listing price expectations.
The good news for sellers- It's still a great time to list your home.
The good news for buyers- There are fewer buyers to compete with- especially for houses priced below $500,000.Posted by Mike Wald on