Today I break down the 2022 real estate market and explain why we saw what we saw. From fluctuating homes values to increasing mortgage interest rates and more, you'll learn why these things happened and you can take that knowledge into 2023. Speaking of 2023, in this video I also explore how the real estate market may behave in 2023 so you can be prepared to achieve your goals in real estate!
Any questions? Reach out to me directly by email at Kyle@SoldByKyleWinn.com or by call or text at 951-852-9980.
Happy New Year! Here we are in the first week of 2023 where I’m going to break down everything that happened in our real estate market here in Riverside County. I have some shocking stats for 2022, but then you’ll want to stick around to the end so you can see what to look forward to in 2023!
Hey everyone it’s your friend Kyle Winn, and if you’ve never seen any of my videos I am your real estate expert here in Southern California in places like Canyon Lake, Lake Elsinore and Menifee. To start off I first want to thank you for taking the time to watch this video. Whether this is the first time you’ve ever watched one of my videos, or if you have seen all of my videos, I really appreciate the support.
I started making videos about 2 years ago and I’ve received some great feedback from people saying how helpful the videos were when it came time to choose where they wanted to live when they decided it was time to move. So fast forward almost 2 full years and my YouTube channel has over 800 subscribers, it has received about 88,000 total views on my videos, along with the total watch time of about 3400 hours. Now for some perspective, the typical, full time worker in the US works 2000 hours in an entire year. So if you do the math, that is a lot of watch time, especially for this little channel out of a little place called Canyon Lake. Anyways, I want to thank every single person who has subscribed to my channel or even watched just a few seconds of one of my videos, whether you watch my videos on YouTube, Facebook, Instagram, or somewhere else, I really appreciate the support.
Now aside from making all these fun videos, I do actually help people just like you buy and sell homes, and I had the privilege of serving numerous buyers and sellers this year. Some of them even came to me after viewing some of those YouTube videos we were just talking about. All of you know who you are, and I’m very grateful for the opportunity to have worked with you this year. I helped clients buy and sell all over Riverside County this year, including places like Canyon Lake, Menifee, Lake Elsinore, Murrieta and Riverside, with values ranging from the $300,000’s to well over $1,000,000. I go where my clients need me, and I am truly grateful for each and every one of you trusting me with your transaction.
Let’s talk about the crazy market we saw in 2022. The real estate market here in Riverside County changed dramatically over the course of 2022.
The number of new listings we saw each month over the first half of the year was fairly typical, but then that started to decline quickly and ended with December providing us with the lowest number of new listings we’ve seen in one month in Riverside County in at least the last 15 years. This means a lot less inventory for you buyers out there.
The number of closed sales in Riverside County in 2022 actually started off really strong, but then quickly dropped off for the second half of the year. Remember I just told you that new listings were down, and we can’t sell many homes if they’re not listed. Plus if you recall interest rates jumped up for the second half of the year, so that caused many buyers to pause their purchase plans as well. To give you an idea about how low sales really were in 2022, from 2010 to 2020 we averaged about 36,000 sales per year, then we saw a jump to about 41,000 sales in 2021, then a big drop to about 31,000 sales in 2022.
In January 2022 the median number of days on market here in Riverside County was at 16 days, then dipped to only 10 days for March through May, and since then it has steadily increased to 35 days in December. Now I don’t want you potential sellers to worry because it is not normal for a home to sell in less than one week with a dozen offers. We are trending back to a more normal market. In fact the average median number of days on market over the previous 10 years was 39 days.
We started 2022 with the month's supply at a historic low of 1.3 months here in Riverside County, which then gradually increased to 3.0 months in October. Since then the month's supply decreased again to just 2.5 months in December. Remember, if months supply is less than 3 months it’s a seller’s market, 3 to 5 months is a neutral, balanced market, and over 5 months is a buyer’s market.
In January the average sale price was $653,000 which quickly jumped to an all time high of $711,000 in April. Since then the average sale price decreased to its low for 2022 in December of $609,000. This is a decline in average sales price of $102,000 in just 8 months! So, what does that mean? Well average sale prices tend to peak in the spring and then fall off toward the end of the year. We saw a drop in average sales price of about 10% over the same period in 2014, but in 2022 the average sale price dropped 14% from its peak through the end of the year.
Interest rates for a 30 year fixed mortgage were just over 3 percent at the beginning of 2022, which gradually increased well into the 7 percent range by October. But then by December we saw them decrease into the low 6’s and even the high 5’s. Now here we are in the first week of January of 2023 and we’ve seen interest rates hovering in the low 6’s so far this year. It’s also important to note that mortgage application rates declined over the second half of the year, which further explains the decreasing buyer demand, lower average home sale prices, plus higher months supply and higher number of days on market for listed homes.
A lot of people have been asking what will happen in the real estate market in 2023. I’ve studied a lot of data and I’ve read a lot of thoughts and opinions about the real estate market heading into 2023, and many believe mortgage interest rates will be the biggest driver of both buyer AND seller activity. The thought process goes a little something like this: if interest rates come down, that will give sellers the confidence to go out and start looking to buy their next home. Many homeowners currently have interest rates in the 3-5% range, so why would they trade that for an interest rate in the 6-7% range right? Especially if they’re moving up into a bigger house, that will be more expensive. Anyways, let’s assume interest rates come down and current homeowners want to move, so they’re going to list their current homes which will provide more inventory that we desperately need. With lower interest rates AND more inventory, the rest of the buyers that did not purchase over the last couple of years will step off the sidelines and jump back into their home search with more homes to choose from. As a result, overall buyer demand will increase again which will drive home values back up. Then with all this increased buyer and seller activity the number of closed transactions will increase compared to that low number of sales we saw in 2022. BUT we’ll have to wait and see how this all plays out.
As for myself, I have some big plans for 2023. I am going to continue making YouTube videos to keep educating you on the communities where I live, work and play. And of course I’ll continue to provide you with valuable real estate updates. So keep an eye out for a lot more new videos in 2023. Another goal I have is to help even more people with their real estate goals in 2023. If you saw my last video I truly believe 2023 is going to be a great year in real estate, especially for buyers. So go check out that video if you haven’t seen it yet. In 2022 I put a lot of time and effort into building out the systems and processes I need to provide my clients with a smooth, enjoyable transaction. So if you’re looking to buy or sell in 2023, or if you know of anyone looking to buy or sell in 2023, I’d love the opportunity to talk to you about your goals and see if I’d be a good fit for you. So if you have any questions about that, or any questions or comments about anything we’ve discussed in this video, please feel free to reach out to me directly