The 2023 year-end figures reveal an unprecedented advantage for sellers. With robust buyer activity, record low inventory, and future uncertainties (rates, elections, wars, inflation, etc), I'm advising potential spring sellers to consider the once unconventional option of listing this winter.
Key Insights from the Year End Data
- Home Price Increase: There was an unexpected 8.1% jump in home prices compared to last year, the largest annual increase observed in over a year.
- Across All Property Types: The price growth was consistent across various property types, including single-family homes, townhouses, and condominiums.
- Historically Low Inventory: The market experienced a two-decade low in inventory, with only about 1.5 months' worth of homes available.
Contrary to expert predictions, the lower interest rates haven't brought the expected surge in inventory. The idea was that with reduced rates, the 'rate lock' effect would weaken, prompting more sellers to enter the market. However, that's not the case. While existing buyers have become more eager to make a move, few new sellers are willing to let go of their favorable rates, deterred by the limited choice of available homes or the prospect of higher payments. Essentially, the market has become tougher for active buyers but more advantageous for sellers who were planning to sell regardless.
Pros & Cons of Selling in Winter vs. Spring:
Let’s explore why many traditionally choose spring over winter for listing their homes. Firstly, winter's aesthetic – with snow-covered landscapes and bare trees – can make properties less visually appealing. Secondly, families often prefer not to relocate during the school year. Lastly, buyer demand typically peaks in spring, influenced by these same factors.
Why might waiting to sell until spring be a wise choice this year? If interest rates continue to fall, we can expect an increase in buyer demand, potentially driving up prices. However, this scenario hinges on two key factors: maintaining the current low inventory levels and a stable economy.
In conclusion, opting to list your property early this year offers some certainty in an uncertain market. We're currently experiencing ideal conditions for sellers, but this spring remains unpredictable. While I'm not overly pessimistic, I do prioritize minimizing risk. Given the choice, my approach would involve weighing a potential risk/reward scenario of +/- 5%. Based on current trends and the state of the world, I like the odds today.
As always, if you have any questions or want to chat about your situation, please feel free to reach out. What do you think will happen this Spring?
