Comparing August of 2023 to August of 2022
Despite August often being an unusual month in real estate, I was actually surprised at the small increase in the median price of single family and condos together in Chittenden County, year-over-year. Last year in August the median sales price was $466,665 and this year it was $475,000 for an increase of only 1.7%. One might think this is an indication of a market slowing down, but often in August, people are taking vacations, getting kids ready for school, and enjoying the “last hurrah” of summer. Nevertheless, it surprised me that the increase was so low. When I compared August of 2021 to 2022, the increase year-over-year was 11.3%! You can understand why I was surprised.
It is of interest that the number of homes sold decreased by 25% in 2023. Given the law of supply and demand, one might expect that the prices would be driven up by more than 1.7%. We think we are seeing buyers in Chittenden County waiting to buy due to the high interest rates. Therefore, the demand isn’t as high as the numbers might indicate, causing the prices to stay relatively flat year-over-year. The median days on market until a seller gets a contract was six days both years. If someone is motivated to buy and the price is fairly accurate, the house will still go under deposit quickly. The average percentage over asking was nearly the same both years, almost 4% over the final asking price which means there are still multiple offers at play.
In Franklin County, 57 homes sold this August compared to 73 last August for a 22% reduction. The median sales price rose 12% from $325,000 in August of 2022 to $370,000 in 2023. This is the type of increase we have been seeing year-over-year in Chittenden County. Many buyers are moving out to Franklin County where homes are more affordable and, in many towns, the commute is reasonable. Competition is pushing the median price up. And the market in Franklin County has been less affected by the end of summer and back to school slow down like in Chittenden County.
People keep speculating that the bottom will drop out of the market soon; that higher interest rates are causing people to wait. But with median sales price rising, doesn’t it make more sense to buy now and refinance when the rates go down? When the interest rates drop, you can afford a higher price, but then you are competing with all the other buyers who waited! And depending on how long you waited and how many houses are on the market, the cost of housing could have risen. Leading economist and high-ranking veteran of the mortgage industry, Dave Stevens, says to buy now and refinance later. He says, “Don’t wait!”
I was impressed with his presentation (link below) which gives data for his statements, not speculation. Please enjoy listening to it if you are interested. I recommend you skip forward to Mr. Stevens’ introduction as the beginning is about “herding cats” to get started! (It was a room of Realtors…) If the link doesn’t seem live, paste it into your search bar. You’ll simply have to register your name and email to watch. It will be worth your time!
https://attendee.gotowebinar.com/recording/1611034557344613889
