Real Estate Market Report Summer 2023
By Ricardo Lavariega08/05/2023
The National Market
On average, home sales in the first half of the year declined 24.5% compared to home sales in the first half of 2022. Quarter one of 2023 was the last quarter of price growth at a national level, with the second quarter recording a decline in prices. January of 2022 saw the lowest months of supply in history and has seen a growth in inventory from that point on. Months of supply grew 36.4% on average from the first half of 2022 to the first half of this year.
The State Market (Wisconsin)
The average decline in sales was 26.2% with a decline in sales of 31.4% in April, which is among the top 3 most active months of the year. The average increase in the median sales price was 8.3% with the highest increase of 11.7% in February. The average increase in months of inventory was 3.3% in June while staying the same from January to June.
The Local Market (Walworth County)
The average decline in sales was 23.1% with the only year-over-year increase of 2.1% being in June this year. The average increase in the median sales price was 9.7% with the highest increase of 20.4% being in June this year. The average increase in SFH inventory was 1.3% with only 2/6 months showing a decline in inventory. Although we’re seeing an increase in inventory, homes with prices between $100,000 and $200,000 are still in very high demand.
Interest Rates
Many homeowners are sitting on interest rates of around 3% causing them to hold onto their properties even though they’ve had an increase in market value. Rates have gone from a low of 2.5% in January 2021 to around 7% today. Each increase of 1% reduces purchasing power by around 11% which is why many prospective buyers have been priced out of the market. The Fed has raised interest rates at a higher rate than in the past and plans to keep hiking them until inflation is tamed.
Key Takeaways
All levels of the housing market saw about a 25% decline in home sales showing how much of the buyer demographic has been priced out. Median sales prices have been declining nationally but are still surging at the state and local levels. Interest rates are expected to increase in the shorter term but may even out at around 6% by the end of the year. The 30-year Fixed Rate Mortgage Average in the United States is at 6.9% as of August 3rd, which is up 38.3% from the rate of 4.99% on August 4th, 2022. High rates have kept prospective buyers from buying while sellers are holding onto their low interest rates. It is still a strong sellers' market with a growing supply of homes at all levels of the market.
If you or anyone you know is interested in buying or selling in the Walworth and McHenry Counties or the surrounding areas, feel free to reach out to me. I can provide you with more information and can help you achieve your real estate buying/selling goals.
RICARDO LAVARIEGA
REALTOR | Resort & Second-Home Specialist
(262) 215-5296
ricardo@mahlersir.com