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Market Statistics and Data

Another month of data has confirmed that the market continues to stabilize. We intentionally use this word, “stabilize”, as what is happening is more of a return to a normal and sustainable market. The frenzy has undoubtedly cooled overall, but demand remains strong with many houses still selling over asking. Let’s review what the individual data points show, as well as share what we are experiencing with our clients so we can glean some insight into what we will see in the coming months. 

Median Home Price 

The median home price dropped again and now sits at $740,000 (off from a high of just over $770,000 in March). We should also point out that unlike April when the average home price still went higher despite a lower median, in May, both the average and the median declined. One reason for this is that above $2,000,000 there were half as many homes sold in May compared to April. In addition, there were 10% more homes sold under the $1,000,000 price point in May compared to April. We point this out as a reminder that a lower median or average price doesn’t simply mean that prices are coming down across the board, but could also indicate a shift in buyer demand or price points.

New Listings and Pending Sales

As would be expected, new listings continued to rise in May, and we saw 436 new homes come to market in May. This is about 5% higher than they were in April and about 4% higher than what we saw in May 2021. We would expect to see another uptick in June and then historically, we see new listings taper off throughout summer. Although these seasonal cycles are quite predictable, there are some factors that could play into whether or not we see continued inventory growth. One such factor could be whether sellers who have been on the fence about selling, and who currently have a mortgage in the 3% range, will still want to sell given that any home that they purchase as a replacement will have a mortgage in the 5% range. We will be watching the data closely to track this.

The next question is what happens to these new listings when they come to market. The answer is that they are still selling, but that there might be signs of stalling in Pending Sales despite an increase in New Listings. Looking at the table below, you can see that since the start of the year, each month has seen an increase in New Listings while Pending Sales reached a high in March, then fell in April, and then ticked up again in May. Since March, New Listings have gone up 24% while Pending sales have gone up 3%.  It would appear that despite more options, buyer demand may be cooling and the trend of buyer’s being more patient and waiting for the right house is continuing.  

1/222/223/224/225/22
New202294372410436
Pending239272297288307

Days on Market (DOM)

The median days on market ticked slightly higher to 5 days (it had been at 4 days for the last few months). The average days on market was flat this month and remains at 12 days. Last month we made the comment that at the time of the newsletter publication, there were only 2 sold homes of the 37 homes that had been on the market longer than 100 days. This month, there are 40 active listings over 100 days on market and there are 4 pending. This is too small of a data set to draw any clear conclusions, but perhaps we will see more buyers continue to shop for value in these properties that don’t sell right away. The more that these “aging” listings go pending and sell, the more that will pull the average DOM higher.

Average Sale to List Price

Last month we had noted that although inventory was increasing, the average list to sale price was also increasing. This indicated that although there were more options available to buyers, the homes that were selling were still doing so very competitively and, on average, about 2-3% above asking price. In May this ticked down and the average sale price is about 1.5% over list price, and the median is right at list price. As we have discussed in the past, the list to sale price ratio is not just affected by buyer demand, but is also an indication of the accuracy of where sellers are pricing their homes. 

Some other points to consider…

Mortgage Changes: The following graphic displays what we have seen with mortgage rates over the first 5 months of the year.  It is nice to see the tapering and flattening of this curve. Experts have indicated that they expect a continued slow rise moving forward. 

National Projections: Experts are continuing to predict appreciation in the 9% range this year with appreciation dropping to more historical norms of 3-5% in the coming years.  

Price Changes: If you have been feeling like you have seen a lot of price changes recently, you are not alone.  May had about twice as many price changes (234) as there were in April (115). For perspective, there was a combined total of 274 total price changes between January and April, and 234 in May alone. If sellers continue to readjust their expectations and price their homes more reasonably, we may see this number come down. If they ignore buyer patterns and demand, we may continue to see price adjustments at these levels throughout the summer.  

We hope you find this information valuable and that it helps you towards your ultimate real estate goals. There are several ways to reach us, so please let us know how we can help. 

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This Ladd team is the most professional team of realtors I have ever dealt with. They are compassionate and detailed in every phase of the process and their communication is above reproach as we were involved in every phase of the sale of our home and the purchase of our new home. Bryan Hilts was especially helpful during the entire process of selling our home and buying a townhome.
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