Market Report Q2 2023
Hopefully, by the time you read this it will actually feel like spring! We seem to have had our fair share of winter weather stretching into spring this year and if you have recently relocated here from a warmer climate, don’t worry it could still snow in June! Now, as the weather warms up around here it usually brings the housing market with it. Has anything gone as usual the last couple years though? The big questions that are in most buyer and seller minds are: what is the 2023 housing market going to bring? And how are markets reacting to the current interest rates and economic environment? While there is no shortage of anecdotes and “gut” feelings we should turn to data whenever possible to stay grounded in reality and not overreact to headlines.
So let’s look at some data, comparing quarter one of this year to quarter one of 2022. This should give us a good indication of where things are headed as we move into Q2, which is typically the highest volume time of year.
In the first quarter of this year, all across Latah County, 22% fewer single family homes have sold. And the average sale price was down 7% from $470k to $438k. There were also 9% fewer active homes than a year ago. So while interest rates have gone up significantly, putting strain on demand and affordability, and causing prices to come down some, the inventory is still very low.
Switching gears to land, land sales in Latah County are down 33% this quarter compared to first quarter 2022. The average sale price is down 31% with inventory down 1%. Now compare that to land sales just in Moscow. In Moscow the number of land sales did not change but the average price was down 29% and total active inventory was up 36%. So there we are seeing a larger decline in the county which is typically large acreage land sales, but not much change within the city of Moscow, other than quite a bit more inventory on lots.
The Residential Income class which would include duplexes, apartment buildings, etc saw a 67% decline in the number of properties sold in Moscow and a 33% decline in the average sold price. This category saw the largest increase in active listings and inventory with a 62% increase from last year to this year. We are leaving off commercial real estate as a category since in our area there is so little volume that the sample sizes are generally too small to be meaningful.
So across all categories we are seeing that the number of the properties that are selling are down significantly from a year ago. We are also seeing a decline in prices, (although not as dramatic), and relatively stable inventory. I think the inventory amount is what will keep our prices relatively high despite interest rates being double what they were at the peak of the market. As long as inventory remains low the demand will prop up those prices. Our local market is not as insulated as it once was, but real estate is still local. And our fundamentals and local economy are strong. This is an outstanding place to live and we continue to see people moving to our area. With all this in mind, there are lots of reasons to be cautiously optimistic as we move through the rest of 2023.
-MIKE CHURCH