MarketNsight, a leading real estate data and analysis provider, reports after 13 consecutive weeks with rates over 7%, the housing market has broken the lows in pending sales set in November 2022. History may be repeating itself, however, and the market may be near the bottom.
“Rates peaked two weeks ago, and pending sales have continued to fall through November 14,” said John Hunt, Principal and Chief Analyst at MarketNsight. “We believe that if rates continue to moderate, we could find a bottom for the year in the next few weeks.”
Through the second week of November 2023, total inventory was up 1.6% over October – a significant decrease from October’s 10% uptick over September. Supply remains constant at two months, and inventory is still 40% below pre-covid levels. Atlanta needs an additional 45,000 units annually to get back to an equilibrium of 6 months of supply.
Hunt mentions, “The housing market is extremely seasonal, and it follows a similar pattern every year.” From the first of the year, inventory tends to peak with closings in the spring. Inventory then falls from that point through the end of the year, and the cycle begins again.
With the lack of inventory comes an incredibly competitive market and higher prices. Home prices have only been negative twice since the pandemic began – in January and March 2023. Year to date, home prices are up 4% over 2022. The average price through the second week of November 2023 is up 17% over November 2021, up 39% over November 2020 and up 61% over November 2019.
“Homeowners are sitting on a lot of equity,” comments Hunt. “We forecast that prices will appreciate between 4% and 6% in 2023, which will be in line with the average annual appreciation over the last 50 years.”
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