Is The Bottom Behind Us?

Or is this just a Spring market blip?

We're officially info April and #LSTAR has released their latest market stats. And if your social media feed is like mine, you're about to see a lot of realtors sharing these stats. The version my brokerage puts out looks like this:

And I'll be honest, at first glance... these look a little bleak. Prices down over 20 percent?! No doubt that's what news outlets will report on.

But there is a bigger picture to review here. Let's not miss the nuances of this data and the long-term trends ok?

So that 20.6% number is compared to March 2022. During a 3-4 month period where the market reached record heights. Not the 2022 record- all-time record highs.

So let's look at it in context so some other months. A good place to start is to compare it to the last couple of months. We are up approx 4% over Feb (sorry if you watched my social media reel and heard 2%, I misspoke!) and over 11% since January. That's a HEALTHY Q1 by any metric.

Here is a chart showing the average sale price for the past 12 months, it sure looks like we are heading up since the low point in Jan 2023.

Perhaps even more interesting. Our average sale price is nearly IDENTICAL to March 2021.

Here's what this looks like in perspective .. let's compare the average sale price for Jan-April (2023 April numbers pending obviously) year over year. 2023 is stacking up to be nearly identical to 2021 in Feb in March, and reasonably close in January. It will be very interesting to see if this trend continues for April.

Sorry if it looks like 2022 is giving you the finger..

Now let's look at some long-term trends. Here's the average sale price for the past 5 years from the LSTAR stats. As you can see, we have had some dips along the way but generally have headed in an upward trajectory save for late 2022.

OK so let's have a little fun with the data. What happens if we lay each year over each other so we can see seasonal/yearly trends at a glance?

COOL! OK so here are some things I notice. MOST years had a gradual increase for Q1 and then softened into the summer followed by a rebound in the fall and into the winter. Exceptions: In 2020, you can almost see the moment that COVID "happened" none of us knew what to do or what to expect. Buyers waited, at one point we didn't even know if we could sell homes. The pent-up demand from that led to a steady increase from May onwards.

The second exception is the end of 2021 leading into early 2022. As noted above 2022 was a year of record-breaking sale prices followed by a steady correction. Note how gradually it came down relative to the spike seen in December 2021 and Jan 2022. It felt like the sky was falling at times but in hindsight, it was a fairly soft landing compared to what it could have been.

Finally, and the point I was making above, look at the similarity between 2021 (grey) and 2023 (purple). Maybe we are getting a do-over of 2021 but without the dramatic ending.

My personal view is that our market has stabilized and that we should expect to see slow growth for the next couple of months and our typical softer summer market. I think the end of the year will mirror previous patterns with a slight net growth, but if you're waiting for early 2022 prices you may be waiting a long, long time!

Waiting for Feb 2022 prices to list my home

Disclaimer: Opinions are my own. Statistics courtesy of LSTAR ITSO MLS data. I do not warrant the accuracy of these numbers but I did my best. Please feel free to reach out with questions or comments!