There is so much talk about buyers sitting on the sidelines right now, but let’s talk about sellers who are also sitting. This is a local trend, but it’s something showing up in many markets across the country also.
UPCOMING (PUBLIC) SPEAKING GIGS:
2/8/23 SAFE Credit Union “Snacks & Facts” (for RE) (register here)
3/06/23 Matt the Mortgage Guy YouTube Live 3pm PST
3/08/23 Matt Gouge Event TBD
3/10/23 PCAR Market Update Lunch & Learn
3/28/23 Downtown Regional MLS meeting
4/1/23 NAA Conference in Sacramento
WORST JANUARY EVER OF NEW LISTINGS:
New listings in January 2023 were down 39% from last year in the Sacramento region. And remember, last year was a lower year of new listings. We basically saw about 800 fewer listings this January. For a national perspective on listings, check out Redfin data and Altos Research.
SELLERS HAVE BEEN SITTING SINCE THE SHIFT
January 2023 is obviously lower than the start of any other year, but check out the black line (2022). New listings have been tapering since the market changed last year, so we have a trend on our hands of sellers holding tight.
QUICK CLOSING THOUGHTS
1) The replacement home: Many would-be sellers are sitting comfortably with a sub-3% mortgage rate, and there isn’t any plan to list. Low rates have been like stay-at-home orders for sellers, and the contrast of higher rates and prices has made it really difficult to afford a replacement home.
2) Not the reason volume is low: Sometimes I hear stuff like, “Bro, sales volume is low because we’ve had fewer new listings.” I know, this sounds logical, but it’s a false narrative. The reason why sales volume has taken such a hit has to do with affordability – not the number of listings. I’m not saying anemic new supply can’t affect the market, but blaming low volume on low supply is ignoring the bigger issue of affordability. For instance, there are over 2,000 active listings in the region today, and buyers could devour these units if they really wanted to, but the problem is affording these properties.
3) Squeezing supply & demand closer: One of the struggles of having fewer new listings is it squeezes the gap between supply and demand, which creates more competition. Last week I talked about the market going from an ice bath in the fall to a hot shower in January, but imagine how different the temperature would be with 800 more listings like a normal January.
I hope this was helpful.
Questions: What would it take for you to move right now? When do you think sellers will list more? I’d love to hear your take.