February 2023 is in the books! The real estate market was wild in 2022, but today we’re going to see how it performed in February 2023! Some of these stats completely shocked me, so if you’re thinking of buying or selling, I have some great info for you today so let’s dive in!
Any questions? Reach out to me directly by email at Kyle@SoldByKyleWinn.com or by call or text at 951-852-9980.
Hey everybody, it's your friend, Kyle Winn, and if you’ve never seen my videos I am your real estate expert here in Southern California, specifically Riverside County. Real estate is always a popular topic in the news, and you’ll often find conflicting reports, so let’s cut through all that and see what’s happening here at home in Riverside County! But before we do, do me a huge favor and hit that subscribe button and the little bell so you never miss my monthly market update videos!
The number of new listings that hit the market typically finds an annual low in the month of December, and then quickly picks up again in January. This was true this year with about 2700 new listings in January, but then that dropped to about 2350 in February. It’s actually very common to see fewer new listings in February than January, and I think that’s because February is between January when people list right after the holidays, and the typical jump in activity we typically see in the spring, like April and May. Overall February tends to be a rather slow month for new listings, but we usually see around 4000 homes hitting the market in February so we actually have very few people looking to sell at the moment.
The number of closed sales in January was about 1550, which is the lowest number of closings we’ve seen in a single month in Riverside County since January 2008, but that bumped up to over 1850 in February. For this time of year we would typically expect to see somewhere between 2000 and 2500 sales, so closed sales are down about 15-25% from where we expect them to be. Now compare this to what I just told you about the number of new listings. From January to February the number of new listings decreased about 13%, but then closed sales increased about 19%. So what does that mean? Let’s find out!
Let’s talk about months’ supply, which is how long it would take to sell all the properties that are currently listed if no new listings came on the market. This metric is a key indicator of whether we’re in a seller’s market, a neutral market, or a buyer’s market. We say a seller’s market is when the month’s supply is less than 3 months, a neutral market is 3 to 5 months, and above that we’re in buyer’s market. In Riverside County the months’ supply was 2.6 months in January, which dropped to 2.5 months in February. Since the number of new listings decreased from January to February, but the number of closed sales increased from January to February, it makes sense that the months’ supply decreased over that period since we now have less supply with higher demand.
Overall we are still in a seller’s market. Inventory is low so buyers don’t have too many homes to choose from at the moment, and even though we’ve seen a slight increase in buyer demand lately there are far fewer buyers in the market compared to the last couple years making it easier for buyers to secure a home today. Now for you sellers out there even though it is considered a seller’s market, don’t get too excited thinking you can list your house and get dozens of offers the first day. I just told you there are fewer buyers out there compared to the buying frenzy of 2020 and 2021… so let’s see what it takes to successfully sell a house today.
One metric we use to understand the current market is the median number of days on market. This was at 42 days in January, which increased to 44 days in February. This the longest it has taken to sell a home here in Riverside County in 4 years. Now with the very low inventory we have, you’d think homes would be selling much faster than that, but keep in mind affordability has put many buyers on the sidelines with home values and interest rates as high as they are. So while housing supply is very low, overall buyer demand has also trended down in the last year or so.
If you’ve seen any of my other market update videos, you’ve heard me say that the average sale price tends to bottom out some time in the last few months of the year, and then starts to increase again in the first part of the new year. This year was no exception as the average sale price has increased to about $646,000, which is the highest it has been since August of 2022! The average sale price in Riverside County hit an all time record of $711,000 in April of 2022, but now at about $646,000 the average sale price is still higher than any time before 2022. It’s a great time for you homeowners thinking about selling since values are higher than any time before 2022 and they seem to be on the way up again as we head into the busy spring time market. Plus you want to keep in mind that every year the average sales price tends to peak between April and June, and knowing that the median number of days on market is at 44 days you should consider listing your home for sale in late March or early April at the latest, which means you should be calling your favorite Realtor right now in order to maximize your proceeds.
One topic we see in the news every day is mortgage interest rates. We started February with the 30 year fixed mortgage interest rate around 6.25% or so, but that increased to about 6.9% by the end of February. I know this number looks scary to some of you thinking about buying a home, especially when your friends got an interest rate in the 3’s a year or two ago, but I would really encourage you to reach out to speak to me or another experienced Realtor and Lender, and we will show you many ways to help you afford to make that move. And I honestly think this is the best time for buyers to shop for a home than any time in the last 3 years. As a buyer today you have less buyers to compete against, homes are about 10% cheaper than they were in April 2022, you’ll actually have a chance at negotiating repairs and terms with a seller, you likely won’t have to let the seller live in your new home for months after close of escrow, you’ll have a chance to get additional concessions from a seller to help you cover closing costs or buy down your interest rate to lower your monthly payment, and if you’re considering a new home so many builders are offering amazing incentives like discounted interest rates, free upgrades, free solar panels, closing cost credits, and more.
Well I'm going to keep studying the market here in Riverside County and I'll continue to deliver updates for you. I suggest you keep an eye on these stats we discussed today to give you an idea of where the market may be heading, but if you don’t want to take the time to go study all this stuff, just follow me to get all my monthly market updates. Well that wraps up my February 2023 market update, but if you have any questions or need help with anything at all give me a call, text, or email.