Year End Evaluation – Comparing 2023 to 2022

It’s hard to believe another year has passed! Happy New Year to you all.

This has been an interesting year in real estate. We are currently seeing a drop in interest rates, but past higher rates definitely kept inventory low. Prices were driven up on average over the list price, but I believe that is because sellers chose to list a bit lower because they were concerned the market was softening; or they wanted to see if they could draw multiple offers over asking. 

At year end I look at single family and condos together in Chittenden, Franklin and Grand Isle counties. There is enough data from 12 months to be able to evaluate with some accuracy what has happened in the market. 

First, let’s talk about Chittenden County since it is the largest of the three counties. The number of single family homes and condos sold dropped 21% from 1,781 sold in 2022 compared to 1,469 in 2023. While this is a huge drop, here is a staggering comparison - there were 2,074 homes sold in 2021 compared to the 1,469 that sold in 2023. That’s a decrease of 41% from 2021 to 2023! It has been a tough few years for buyers due to low inventory.

The median sales price increased a healthy 6.6% from $450,000 in 2022 to $480,000 in 2023. Sellers received 102.4% of list price in 2023 and 104.35% of list price in 2022.  Median days on market before sellers accepted an offer was the same, six days, a very short window.  

One more statistic I’d like to share for Chittenden County is what we refer to as the “absorption rate.” We ask this question - based on how many homes sold on average per month in the past year, compared to how many are currently on the market, how long would it take to sell all those homes or “absorb” them, if no new inventory enters the market? In 2023, an average of 123 single family homes and condos sold. There are currently 130 for sale. This means there is approximately a one-month inventory of homes for sale. And in certain price points, there is even less than one month. Six months of inventory is a level market favoring neither buyers nor sellers. This level of inventory is a “super” seller’s market. This is not different that in past years, but is worth pointing out again. 

In Franklin County, the number of sales decreased 23% from 599 in 2022 to 486 in 2022. The averages sales price increased by 6.25% from $325,000 to $345,316. The percentage of list to sales price was not much different, 101.93% in 2022 and 101.1% in 2023. The median days on market were nearly the same, 7 in 2022 and 8 in 2023. 

In Grand Isle County we always see fewer sales due to the size of the county. 139 sold in 2022 and 106 in 2023 for a whopping 31% decrease. The average sales price increased 7.6% from $395,000 in 2022 to $425,000 in 2023. Sellers received less than their asking price in 2023 compared to 2022, actually 2.5% less. But with the average sales price going over list price, sellers likely didn’t care what the percentage over asking was. They cared what was in their pocket on closing day!

If current interest rates continue throughout 2024, or if they go lower (we hope!) I predict that more inventory will come on the market and we will see an increase in home values of about 6% over 2023’s prices. I don’t think we will see the crazy 12% or higher increases we saw just a couple of years ago, but time will tell. Election years always provide surprises in the market. I predict that sellers may not see huge increases in value, but they will still see the investments in their homes increase. Also, it has not an easy market for buyers. The dropping of interest rates will help buyers who were struggling to buy when interest rates were hovering around 8%. 

Happy New Year! We’re excited to see what 2024 will bring!