January 2023 Market Update

INVENTORY

Nationally, the real estate market continues to be impacted by shifting demand and limited supply. Locally in our area of Stillwater, White Bear Lake, Lake Elmo & Hudson however we have seen a small increase in active listings from December – January during this usual seasonal inventory break; indicative that as spring approaches there is an anticipated improvement heading into warmer temperatures. Ultimately with all factors at play variables like neighborhood, amenities and affordability have an impact when discussing real estate inventory trends - it seems likely these trends will continue towards a more balanced buyer-seller landscape going forward.

DAYS ON MARKET

After thoroughly evaluating the local housing markets, we've noticed a dramatic increase in Days on Market - ranging from 8% to 69%. This trend reflects more of a "normal" market compared to previous years when homes would often sell quickly and for cash. The inspection period and other contingencies associated with home closings have likely contributed to this shift: it could indicate that buyers are being increasingly discerning, thus prolonging time until sale. With an uptick in Days on Market spanning 54-90 days, these changes signal stability rather than instability within our real estate landscape.

PRICING

Our local real estate market is providing insight on seller pricing strategies in 2023. In January, the close price to original list price ratio has been consistently over 98%, indicating sellers are adjusting their prices to better align with fair-market values. This was a marked improvement from December when the closest we saw were ratios of 96%. Time will tell how much this predictor changes, but it could suggest that more informed and accurate selling points for properties may be appearing throughout our area markets at an increasing rate.

Despite slight decreases in list prices across local markets, overall the market remains stable. Low inventory levels continue to be a key factor influencing pricing; nonetheless buyers remain interested, and seller and buyer expectations are adjusting accordingly as interest rates drop. The Hudson numbers may have been somewhat skewed by new construction home closings, which pulled up averages due to low number of transactions made possible by limited supply amidst sustained demand - indicative of a settling crazy marketplace from the last two years.