According to the Knock Buyer-Seller Market Index released this month, the housing market appears to be moving further in the direction of favoring buyers. This as markets that cooled the fastest in response to the quickly rising interest rates and home prices continued to lessen. Meanwhile many strongholds show no sign of slowing with some expected to gain momentum in 2023.
For the first time since July 2020, the index showed the housing market entered neutral territory. All but the Fayetteville, North Carolina market have moved towards favoring buyers over the last year. Last month, 51 markets were a sellers’ market while 39 were neutral and 10 favorted buyers.
The shift is most notably due to declining home sales. Only 127,000 homes were sold in 100 of the largest markets in October. This is down from 262,000 a year earlier, a 51.4% decline. The median home price was $388,000 compared to $360,000 last year.
“The housing market has borne the brunt of the Fed’s attempt to control inflation,” said Knock co-founder and CEO Sean Black. “At the same time, it has continued to demonstrate its resiliency. Despite moving into neutral territory, sellers still hold the advantage in a majority of the nation’s largest metros, and many will continue to favor sellers well into 2023. With interest rates stabilizing in recent weeks and less competition, buyers may begin to re-enter the market over the next few months, which could result in a return to a more normal spring home-buying market.”
In all of the top 10 buyers’ markets, the month’s supply surpassed two months except for in Nashville. Las Vegas had a supply of 4.2 months. This is the largest of the 100 housing markets considered in the index.
Phoenix, the nation’s top buyers’ market, saw 34 days for a typical listing to sell in October. It was normal for a home to stay on the market for three weeks or more in the top 10 buyers’ markets. Columbus, Ohio led the nation with 44 days on the market.
Over the next 12 months, experts are expecting the housing market to balance. By October 2023, 26 markets are forecast to be buyers’ markets compared to 10 in October 2022. 38 markets are expected to remain a sellers’ market while 36 will be neutral.
The national median sales price is predicted to peak at $416,000 in June 2023 before falling to $410,000 in October 2023. This would amount to a 5.6% increase over the past 12 months and follows a typical home-selling season.
Inventory is expected to grow in all but a few markets. Last month, the supply was 1.9 months and is expected to increase to 3.4 months at this time next year. A balanced market is considered somewhere between four to six months of supply. This will mark the first time the market has approached a supply balance since April of 2019 when the supply crested at 3.7 months.
You can view the full report here.