Whether this is your first edition of the Home Sales Predictor, or you’ve been with us since October 2020, thanks for coming on this ride with us. We’re down to our final prediction for 2022, but we know, without a doubt, 2023 will be another year full of speculation, highs and lows, and homes bought and sold.
Now, let’s get into the data.
November home sales were 7% lower than we predicted with 383K closed transactions across the US. You might be saying, that feels low. And it is. We haven’t seen a November that low since 2016. But, while that’s a 37% decrease YOY, when we look back pre-pandemic that’s only a 16% decrease from November of 2019.
Before we continue with the data, something really important to keep in mind is that when we have super highs and lows it distorts all our numbers. Mike DelPrete talks about this in his latest blog. So, while a headline for this data might try to shock and awe and say that we’re down 37% YOY, it’s important to remember what last year was. A total outlier. We have to look back further than that.
Looking ahead as we close out December and into January we predict a small increase in December with 394K homes sold and then a 25% drop to 298K homes sold in January. And while that feels low compared to anything in recent memory, when we look back to pre-pandemic in Jan 2020 there were 379K homes sold, in Jan 2019 312K, and in Jan 2018 320K.
And we get it. The big drops are what are making people panic. And while our crystal ball isn’t any clearer than yours, it will be hard to say if recession fears are fully going to impact 2023 until we get into some of the seasonably busier months.
So what do you do right now? This is the time to work both on your business and in your business. Get in front of your sphere of influence. Keep them informed on the changes in interest rates and mortgage rates and what that means for the housing market. Show them the benefits of buying and selling in your marketing specifically.
Some other key points to focus on and share:
- While the Fed did increase interest rates slightly last week, mortgage rates are still dropping and dropped for the 5th straight week last week.
- Home prices also continue to drop. And while that might panic some, due to such tight inventory, there is likely a natural floor for how low they can drop. That doesn’t totally solve our problem on affordability, but keeps us away from the chaos of the previous housing crash.
- Finally, the real estate industry is always the first to feel the effects of the economy, and always the first to recover. So while things might be a little wonky for the next 6 months or so, we should start to see people calm and come back into the market sooner rather than later.
We of course wish we were closing this year still all rainbows and butterflies as it has been the past few years around the industry, it’s also not all doom and gloom either. Stay focused on your business, be mindful of the things you can control, and take a deep breath. We’re going to get through this and come out stronger on the other side.
Cheers and Happy Holidays! We’ll see you in the new year!