2023 was, let's say, a strange year for real estate, marked by unexpected twists and turns. The market witnessed a rollercoaster of fluctuating mortgage rates, shifting buyer sentiments, and varying inventory levels, all culminating in a uniquely challenging landscape for buyers and sellers alike.
The December numbers are in, so let's break things down and take a look at where we are today and what you need to know about the market as we start the year.
A Silver Lining in Sales
According to the National Association of REALTORS® (NAR), U.S. existing-home sales have finally pivoted, rising 0.8% from the previous month. This marks an end to a five-month streak of declining sales. However, it's not all sunshine and roses - sales are still down 7.3% compared to last year, reflecting ongoing affordability challenges.
Interestingly, most closed sales during this period were homes that went under contract in October, when mortgage rates were sky-high. But with rates now on the decline, there's a glimmer of hope for a resurgence in home sales.
National Inventory and Pricing
Nationally, the inventory levels are concerning. As we entered December, there were only 1.13 million units for sale. This figure is down by 1.7% from the previous month but slightly up by 0.9% from last year. With just a 3.5-month supply at the current sales pace, options for buyers are limited.
This scarcity of inventory continues to keep sales prices elevated nationwide. NAR reported a 4% annual increase in the median existing home price, now at $387,600 - marking the fifth consecutive month of year-over-year price gains.
Orange County
Long Beach
Long Beach Snapshot
- New Listings: The market experienced a contraction in new listings, with Single-Family homes dropping to 53 (a decrease of 13.1%) and Townhouse-Condo homes falling to 39 (down 29.1%).
- Pending Sales: A similar downward trend was observed in pending sales, with Single-Family homes declining to 47 (a drop of 45.3%) and Townhouse-Condo homes reducing to 29 (down 32.6%).
- Inventory: The inventory of available homes also saw a significant reduction. For Single-Family homes, the inventory decreased to 159 (a 36.7% decrease), and for Townhouse-Condo homes, it went down to 138 (a reduction of 6.1%).
- Sales Price: Despite these declines, the Long Beach market remained competitive with notable price increases. The Median Sales Price for Single-Family homes rose by 10.2% to $915,000, and for Townhouse-Condo units, it marginally decreased by 1.1% to $539,000. This pricing trend, along with a decrease in the Days on Market (25 days for Single Family homes, down 16.7%, and 40 days for Townhouse-Condo homes, up 60%), indicates a market that, despite fewer listings and sales, continues to be brisk and competitive.
Conclusion
For Buyers
- Stay Informed and Nimble: Market dynamics are shifting, so keeping abreast of the latest trends is critical.
- Explore Financing Options: With prices still high, finding the most favorable mortgage rates and terms is more important than ever.
For Sellers
- Price Smartly: With rising prices, it's tempting to aim high. However, innovative pricing is crucial to attract genuine buyers.
- Move Quickly: The fast-paced market means you must be prepared for quick transactions.
