1st Look at Local Housing Markets in October
Another significant step down in sales
This is the first look at local markets in October. I’m tracking about 35 local housing markets in the US. Some of the 35 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.
Closed sales in October were mostly for contracts signed in August and September. Mortgage rates moved higher in September, and that impacted closed sales in October.
The further sharp increase in mortgage rates in October - with the 30-year mortgage over 7% - will impact closed sales in November and December.
Denver, Las Vegas, and San Diego
Here are some local comments …
From Denver Metro Association of Realtors® (DMAR): DMAR Real Estate Market Trends Report
As the Denver market normalizes, active inventory declined slightly to 7,290 homes on the market at month’s end. However, this is an increase of 115.94 percent year-over-year. While this number reads as a jump, the current inventory is still less than the pre-pandemic inventory numbers of 8,557 active listings in October 2019.
As prices adjust, the median days in the MLS continues to increase, up 240 percent from five days last year to 17 days this year. While this number continues to grow, many homes on the market are priced based on peak market activity, and are thus incorrectly priced for the current market.
emphasis added
From Las Vegas Realtors® Las Vegas area home prices hold steady after three-month slide LVR housing statistics for September 2022
LVR reported that the median price of existing single-family homes sold in Southern Nevada through its Multiple Listing Service (MLS) during October was $440,000. That’s down 2.2% from September, and down from the all-time record price of $482,000 in May. The median home price is still up 7.3% from $410,000 one year ago. …
“Ever since mortgage interest rates started rising this summer, we’ve seen the housing market cool down,” said LVR President Brandon Roberts, a longtime local REALTOR®. “Prices have been going down slightly since we hit our all-time peak in May. We’re seeing more homes on the market, and fewer homes are selling. Through October, local home sales are down about 22% from this time last year.”
From the Northwest MLS: Northwest MLS brokers say motivated home buyers turn to creative financing options
NWMLS director Jeff Pust said, “There is no doubt the market has changed with higher interest rates being the main culprit.” He acknowledged some buyers are waiting to see if rates and home prices drop. …
“As for the interest rate ‘elephant in the room,’ the time has come for buyers and sellers to revisit financing methods from previous markets,” Gary O’Leyar, [owner/CFO at Berkshire Hathaway HomeServices Signature Properties in Seattle] said, mentioning the use of buydowns, adjustable-rate loans, carrying back second deeds of trust, and closing cost allowances as possible options.
Active Inventory in October
Here is a summary of active listings for these housing markets in October.
Inventory in these markets were down 37% YoY in January, down 7% YoY in March, and are now up 93% YoY! So, this is a significant change from earlier this year, and a larger YoY inventory increase than in September (up 77% YoY).
Notes for all tables:
New additions to table in BOLD.
Northwest (includes Seattle) and Santa Clara (includes San Jose)
New Listings in October
And here is a table for new listings in October. For these areas, new listings were down 22.9% YoY. Potential sellers locked into their current homes with low mortgage rates has pushed down new listings.
Last month, new listings in these markets were down 16.5% YoY.
Closed Sales in October
And a table of October sales.
In October, sales were down 38.0%. In September, these same markets were down 28.5% YoY Not Seasonally Adjusted (NSA).
Note that in October 2022, there were the same number of selling days as in October 2021, so the SA decline will be similar to the NSA decline. And this suggests another significant step down in sales!
Many more local markets to come!