Last January we decided to run a trivia contest to guess the medium sales price for 2023 across Hampton Roads and offered to donate $100 to the charity of the winner’s choice. Joey’s guess was $331,400 and the final number was $330,000 so he was the closest. Congrats to Joey and to ForKids, the charity he picked. We will run the same contest again this year, so see below for the details.
As you can see in this chart from the Real Estate Information Network (REIN, our local MLS), the median sales price continues to increase (it was $312,000 in 2022). In this chart, the red bar is the medium sales price, the gray vertical bars are the total number of homes that sold each month, and the green bar across the bottom is HUD’s estimated of the median family income.
If you look at the statistics in the chart it might appear that the trends of 2004-2009 are similar to the market now, but we do not believe that will mean that we are in store for a price drop similar to the one that occurred between 2007-2011. A large part of the decline during that time frame was the result of bank foreclosures caused by lax loan underwriting. Thankfully, lending standards are much tighter now, and the Month’s Supply of Inventory (MSI) is still well under 2 months. In an average market the MSI should be between 5 and 7 months, so the inventory (number of homes listed for sale) could double and we would still be in a seller’s market. As a result, we think that the prices will continue to trend upwards.
Based on our experience, knowledge, and the statistics of the current market, we predict that this spring will continue to be a seller’s market. Interest rates have dropped over a point since October, and assuming they stay below 7%, we think the medium sales price will continue to rise.
What do you think? Reply back to this email with your prediction of what you think the median sales price will be for 2024. We will make a $100 donation in your honor to the charity of your choice for the guess closest to next year’s number.
As always, every situation is different, so give us a call (757-726-7653 for Lee, 757-434-9084 for Harry) or reply back to this email, and we will be happy to talk through your individual situation.
Happy New Year.
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