Alright everyone January 2023 is in the books! The real estate market was a roller coaster in 2022, but it’s a new year and a lot has changed. If you’re thinking of buying or selling, I have some great info for you today so let’s dive in and see the new year started!
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 in places like Canyon Lake, Menifee and Lake Elsinore. Real estate is always a popular topic in the media, but the national trends don’t necessarily apply to every market, so let’s dive in 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. As I predicted over the last few months, this year was no different with 2515 new listings in January, up about 42% from just 1764 in December, which was the lowest we’ve seen in Riverside County in a single month in at least the last 15 years. Now even with this significant increase in new listings of 42% from December to January, this is the slowest start to the year in terms of new inventory that we’ve seen in at least the last 15 years. So what does this mean? Well a lot of people think there’s a major housing crash right around the corner, but if that happens it won’t be due to excessive inventory unless we see the number of new listings creep up on 5000 homes per month for many consecutive months, and the last time we saw 5000 new listings in one month was in 2011 as we were still recovering from the housing crash of 2008. So in simple economic terms, supply is too low and demand is too high for home values to just fall off a cliff right now.
The number of closed sales in January was 1523, which is the lowest number of closings we’ve seen in a single month in Riverside County since January 2008 at 1432 when the housing market was just crumbling to pieces. But today is nothing like 2008. We’re in a very different market because the number of new listings is at a bit of a historic low, so we can’t have a high number of sales if there are no homes for sale. In January of 2008 when 1432 homes were sold, there were over 37,000 homes on the market, and now in January of 2023 when 1523 homes were sold, there were only about 6000 homes on the market. So yes, while the number of units sold is at a 15 year low, the inventory is very low as well.
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 has doubled in just 5 months, and this is 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, buyer demand has also trended down in the last few months.
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 2.5 months in January, which tells us we are actually still in a seller’s market. Inventory is low so buyers don’t have too many homes to choose from at the moment but there are also fewer buyers in the market, so even though it is considered a seller’s market, sellers need to have some patience since it is taking a little bit longer to sell a house today compared to the last few years. The days of receiving a dozen offers over asking price the day a home hits the market are behind us, for now.
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 January was no exception as the average sale price was almost $638,000 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 $638,000 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 seem to be on the way up again. 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 42 days you should consider putting your home on the market in March or April, which means you should be calling your favorite Realtor no later than the end of February in order to maximize your proceeds.
One topic we see in the news every day is mortgage interest rates, which were in the low 6’s in January, typically between 6 and 6.25%, which is the lowest they have been since August of 2022. Now if you want to buy a home but you don’t think you can because of how “high” interest rates are at the moment, you really just need 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 cheaper than they were in most of 2022, you don’t have to offer over appraised value to beat out other buyers, you’ll actually have a chance at negotiating repairs with a seller, you likely won’t have to let the seller live in your new home for months after close of escrow, interest rates are lower than they’ve been in the last 4 months or so, 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 my monthly markets. Well that wraps up my January 2023 market update, but if you have any questions or need help with anything at all give me a call, text, or email.