Frozen. Stuck in place. Not moving. That pretty much describes sellers. But in 2024 there’s a flicker of hope as sellers have thawed out just a bit. I’ll explain what I mean below, and I suspect many markets around the country are experiencing a similar trend. Any thoughts?
UPCOMING (PUBLIC) SPEAKING GIGS:
01/31/24 Joel Wright & Mike Gobbi Event 9am (on Zoom here)
02/01/24 Gateway Event (private)
2/09/24 PCAR WCR Event (11:30am-1pm (more details))
2/13/24 Downtown Regional MLS Meeting 9am
2/21/24 Matt the Mortgage Guy YouTube Live
3/11/24 Yolo Association of Realtors (YAR only)
3/21/24 2024 Market Update for Brent Gove Team (big event free)
3/26/24 Orangevale MLS meeting 9am
3/27/24 SAFE Credit Union Lunch & Learn (TBA)
4/11/24 Lindsay Carlisle Event (private)
4/25/24 HomeSmart iCare Realty (details TBA)
5/9/24 Empire Home Loans (details TBA)
6/11/24 Elk Grove Regional MLS Meeting 8:30am
6/13/24 Sacramento Realtist Association (details TBA)
MORE NEW LISTINGS IN JANUARY 2024:
A few days ago, we officially surpassed the number of new listings in January from one year ago in Sacramento. By the end of the month, we should have about 10-15% more new listings compared to January 2023. Granted, the number of new listings today is still anemic, but more is the direction we want to go. So, while this is statistically minor, it feels like really positive news. Check out a reel I did on Instagram to explain this.
“MORE IN 2024” IS THE THEME:
In my 2024 outlook, one thing I mentioned is we aren’t going to be anywhere close to normal for the number of sales or new listings, but the hope is to see more. Well, January showed us more new listings, more pendings, and probably more sales (the verdict is still out on sales, but I’m pretty sure we’ll beat January 2023 in the region).
BRO, SELLERS ARE NOT FLOODING THE MARKET:
When sharing about more new listings, some people think sellers are flooding the market, but that’s not the vibe. If it was, I’d say so. This image is a helpful way to think about the trend. Remember, having more doesn’t automatically mean a flood. I find a similar dynamic with the narrative on bank-owned sales today. There are definitely more this year, but it’s a tiny amount below 1% of all sales locally. Nonetheless, sometimes people see more and create a narrative about a flood of foreclosures.
CELEBRATING A SECOND-PLACE TROPHY
Okay, some real talk. Last January was the worst January in decades for the number of new listings, and this January is going to be the second worst. Look, I’m not trying to sound negative, but I want to give context to what I mean by more new listings this year. Ultimately, sellers are still frozen, but they’ve thawed out slightly from 2023 levels. The green bars help show the pre-2020 normal, and we’re nowhere close (still about 38% or so below that level).
BUT WHAT’S HAPPENING WITH BUYERS?
I’m glad you asked. We’ve actually seen more pending contracts in January 2024 compared to January 2023, so we don’t have a situation with vastly more supply compared to demand. This is something we can watch closely over the spring, but right now we don’t have a lopsided market where supply is far outweighing demand locally.
HELLO REAL ESTATE PROFESSIONALS:
Friends, this is really good news because it’s volume that pays the bills in real estate. I realize this isn’t a huge change, but more is absolutely the direction we want to go. This is also good for buyers and sellers because it’s healthy in the housing market when more people are participating.
THIS IS NOT ABOUT FEAR, BUT LIFESTYLE
Someone told me sellers are afraid of future price declines, so they’re listing their homes. Look, that’s fine if true, but I disagree. The word fear doesn’t typify the bulk of sellers I’m talking to right now. I find sellers today are mostly listing for lifestyle reasons such as inheriting a property, moving out of state, job transfer, moving up, moving down, divorce, etc… Fear is not the overarching theme or motivator. If it was, I’d be the first to say so.
An Instagram reel I made:
View this post on Instagram
WE NEED TIME TO SEE THE TREND:
This looks like a trend, but let’s see what happens in February and throughout the spring. In other words, I think it’s premature to say, “Sellers have thawed out completely, and we’re only going to see an increase from here on out.” Hopefully that’s the case. Now let’s see what the market does.
Thanks for being here.
Questions: What are you hearing from sellers right now? And what are you hearing from buyers? What stands out to you above?
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I will not be able to sell until we see a major decrease in the high interest rates. Until FED bankers cut rates then I am stuck where I am living. It would cost me twice as much to sell and buy a new home at higher price, higher interest rates and I would end up with a much smaller and crappier home. No way!
Thanks for sharing. You are not alone in this reality. At all. The math simply doesn’t work for so many people. This is why the iceberg above works well because the number of people not selling is glaring. The part I wonder about too is how many people won’t sell at all. The longer owners wait and presumably pay down their mortgage, the less incentive there will be for some to list their homes. Of course, it’s your forever home until it’s not, so lifestyle sometimes interrupts plans. Only time will tell, but this issue with fewer listings isn’t going to work itself out quickly.
Thanks for another great post Ryan, and as usual, I find the the information is spot on! On the seller side, I currently have 5 new listing going on the market between now and April. EVERY SINGLE ONE is listing because of a job transfer, or an owner moving into assisted living, etc. On the buyer side I have several that are willing an able to purchase, but there just isn’t a lot of inventory to show them. Having seen a lot of different types of markets over the years, I have learned that you just need to work with the market you’re in. That being said, hoping that 2024 shows an improvement in interest rates, and a subsequent increase in inventory!
Thanks Michael. I appreciate the insight. Sounds about right. It’s lifestyle for the win right now. Like I wrote about, I think some people mention fear as the motivator, but that’s not based in reality. It’s easy to impose a narrative on the market if we’re not careful. I’ve heard that consistently too about buyers. They are starving for quality listings. We should continue to get more as spring kicks off, but often February still feels like it’s not enough to satisfy demand. Thanks for the intel. I appreciate it as always. Good luck with those five listings. That’s great to hear.
Love seeing good signs. I’m optimistic that this year will be a little better than last year in terms of volume.
Thanks Gary. Yeah, that could be the case. It’s hard to go lower than last year. It’s technically possible, but difficult to get that low.
Love the iceberg metaphor. Next you’ll need to stretch it to mention the Titanic.
I’ve noticed a much higher percentage of recent listings are homes I appraised for estates, supporting your lifestyle conclusion.
Thanks Joe. Ha, I’m sure I could fit the Titanic in there somewhere. 🙂 Interesting to hear. I see quite a bit of that in my book of business too. I think it’s more difficult to divide assets these days among heirs. Keep me posted with anything you’re seeing.
The listing volume in my area of Augusta/Richmond County, GA is continuing to drop on a daily basis. There are more houses going to pending status or being removed from the market than the number of new listings + back on the market. Also, we are over 50% less than January 2020. Based on information supplied by local agents and sellers, the 30 yr rate needs to be down to 5.25-5.5% for an appreciable number of owners to get back in the market for whatever reason.
Thanks for sharing, Pierce. I always appreciate hearing stuff like this. Yeah, rates really would need to drop substantially for sellers to jump into the game. The math is far from mathing for many people.
I am doing some appraisals for possible listing/personal planning. Potential sellers are trying to figure out their equity and purchasing power for a move in the near future.
That’s great to hear, Lori. I’m glad you’re available to assist owners like this.
Great article and even better context and facts!
Appreciate it. Thanks Tom.
It would appear that the market is NOT thawing. And why should it? Most homeowners are sitting on mortgages at less than 4% and I would assume having bought houses they are pleased with (at time of purchase). If I were sitting on a 3% mortgage, I think I would consider upgrading that property rather than the imaginary pig in a poke that I somehow envision (a real estate agent’s dream). And, finally, why is that a problem? A 3% mortgage is extraordinary and should afford whatever I want to do in the house that I already am living in. (For the record, my house is paid for, so I am not speaking for myself.)
Thanks for your take. Congrats on being paid off too. That’s fantastic. I’m not sure about the market thawing as that could mean lots of things, but it does look like sellers and buyers are in a slightly different place than one year ago. That’s what the stats are showing us. Slightly more of each = thawing. But there is no mistaking buyers and sellers are still very much frozen more than anything. My goal was to clearly communicate that in this piece, and hopefully that came across. We are a long way from seeing normal numbers for new listings or sales, but we’ve seen some subtle changes in the stats lately, which is worth looking at closely.
Yes, thank you, you did communicate that. I have to wonder if homeowners are “frozen” in place or are in a rather “happy” place given these low rates. I don’t see the market moving much until rates get down to 5% or so.
Thanks. Yeah, that’s a distinction worth considering. I find the narrative on social media is that owners are really unhappy, and there is surely some of that. But many people are stuck in place and loving a low mortgage payment. I tend to agree. It’s hard to see a substantial change in volume without a more substantial change in affordability (lower rates, lower prices, etc…).
Hi Ryan,
In the East Bay, we have seen many properties that were pulled off the market for the holidays come back on and sell for prices nearer what we would have seen last summer. (higher than last fall) Very little fresh inventory, but this last we see the tide turning. Very well-prepared homes this last week. Thank god!
Thank you so much for sharing. I appreciate it. I was just talking with a real estate agent this morning about buyers feeling frustrated at a lack of listings. It’s getting a little better, but it’s still slim. Regarding getting back to summer prices, I find that typically happens in the spring in Sacramento. It’s like the market gets dull for a few months, but then it picks back up where it left off. I’m eager to see how this spring unfolds. So far we’re seeing all the normal stuff we typically see. Price change is always a wonder though because it takes time to see that. I’m not sure we have a grasp on that yet. Loved hearing your take. I’ll watch Sacramento closely in that regard too.
Ryan,
Your posts are always fun and informative!
I agree with the lifestyle narrative as well. To me it makes sense that sellers with low interest rates and high appreciation would only move for the 5 D’s.
Those being Death, Departure (leaving the area or state) Divorce, Delivery of a child or Downsizing. Otherwise it most likely doesn’t make sense. I feel like that has been the truth for all or most of 2023 and now. Without a compelling reason why do it?
Thanks so much Robin. Good to hear from you. I hope you are well. I love the way you put those D’s. I don’t often include Departure when I talk about D’s, but that’s golden. Really like that. And yes, staying put is the name of the game for so many right now.
In my local area, real estate listings have surged by 35% year over year. The figures for 2023 surpassed those of 2022, and the current figures are nearly triple the levels observed at this time in 2022. As people tend to move locations more frequently and housing needs change in general, it’s likely that people are starting to adjust their expectations and consider relatively higher rates to make those changes happen.
Thanks Shane. I appreciate hearing. It’s interesting to see how different markets are reacting right now. It seems like some portions of Texas and Florida are showing gains not seen in some other parts of the country right now. The market is always moving. Let’s keep watching. Please share your insight any time also. Now that you have an approved comment, you can comment without moderation (unless a link is posted).
Thanks Ryan!
I see my post had an error as I meant to say “and the current figures are nearly triple the levels observed at this time in **2021**.
I am located in Florida and one thing to note regarding listings is that I have observed that many homeowners currently choose list prices exceeding reasonable market expectations. This suggests more aspirational pricing than motivated selling for some.
Trying to decipher the sellers who are truly motivated to sell their properties can be challenging at times. As such, mass statistics like those I sourced can be misleading without this context.
Thank you Shane. Great commentary too. I appreciate your keen mind when it comes to stats and thinking through them.