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Here are the basics - the ARMLS numbers for March 1, 2023 compared with March 1, 2022 for all areas & types:

• Active Listings (excluding UCB & CCBS): 14,739 versus 4,588 last year - up 221% - but down 5.5% from 15,598 last month
• Under Contract Listings (including Pending, CCBS & UCB): 9,109 versus 12,050 last year - down 24% - but up 16.6% from 7,810 last month
• Monthly Sales: 5,693 versus 7,993 last year - down 29% - but up 31% from 4,357 last month
• Monthly Median Sales Price: $413,000 versus $445,000 last year - down 7.2% - but up 0.7% from $410,000 last month

Volumes remain much lower than a year ago, but they have recovered some ground. Monthly sales were down 29% compared with 2022, which is a major improvement from the 39% deficit last month.

Although the market remains unhealthy from a volume perspective, it is warming up from a supply versus demand point of view. The supply of active listings has been trending lower for several months, although this is not true of the luxury sector, particularly Paradise Valley. You might expect demand to be very weak because mortgage rates have jumped back over 7% again. However, buyers are not capitulating and the growth of listings under contract is much healthier than we expected under these circumstances. The 16.6% growth in listings under contract since the beginning of February, and the 31% increase in the monthly sales rate are surprisingly strong.

The balance between supply and demand has shifted significantly over the past 3 months and there is now upward pressure on pricing once more. We note that the monthly median sales price is up 0.7% over the last month while the average price per square foot for closed listings has risen by 1.2%. Pricing remains weaker than a year ago when we were still in a boom period with exceptionally low supply. But the trend is now pointing higher, not lower. It is possible that the Federal Reserve may do more damage to interest rates, but the risk premium in mortgage rates is currently far above normal. This means there is plenty of scope for lower mortgage rates to be introduced if the risk abates.

The current pricing trend may contradict the claims by various amateur pundits and their daft YouTube channels, but there is almost no data that supports the theory that prices are going to collapse from this point. For this to happen we would need to have a wave of new supply creating problems for sellers. While this is always a remote possibility, there is very little foreclosure activity and low levels of mortgage delinquency. So where is this flood of homes for sale supposed to come from? The builders have cut back drastically on new home permits, so we are more likely to see a shortage of homes for sale than a glut. And rising mortgage rates discourage homeowners with mortgages from selling because that would mean the loss of their cheap loan and the acquisition of a much more expensive one.

Even though buyers are scarce, homes for sale remain stubbornly hard to find. It is always good for sellers when they have less competition from other sellers. This means much less need to cut their asking price, especially if they are patient and present their property well.

2 Things Sellers Need to Know This Spring

A lot has changed over the past year, and you might be wondering what’s in store for the spring housing market. If you’re planning to sell your house this season, here’s what real estate experts are saying you should keep in mind.

1. Houses That Are Priced Right Are Still Selling

Houses that are updated and priced at their current market value are still selling. Jeff Tucker, Senior Economist at Zillow, says:

“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.”

The need to price your house right is so important today because the market has changed so much over the past year. Danielle Hale, Chief Economist at realtor.com, explains:

“With a smaller pool of buyers today and more competition from other homes on the market, homesellers will likely need to adjust their price expectations in the market this spring.”

While this spring housing market is different than last year’s, sellers with proper expectations who lean on a real estate expert for the best advice on pricing their house well are still finding success. And that’s great news if you’re thinking about selling.

2. Buyers Are Still Out There

As mortgage rates have risen and remain volatile, some buyers have pressed pause on their plans. But there are still plenty of reasons people are buying homes today. Lisa Sturtevant, Chief Economist at Bright MLS, spells out the mindset of today’s buyers:

“For some buyers, higher mortgage rates simply means buying a home is out of the question unless home prices fall. For others, higher mortgage rates will be a hurdle but ultimately will not keep them from getting back into the market after sitting on the sidelines for months.”

That’s why, if you’re interested in selling your house this spring, it’s helpful to work with a real estate agent who can help connect you with those buyers who are ready to purchase a home.

Bottom Line

There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, connect with a trusted real estate advisor.

The last few years have changed how we use and fill our homes. These trends reflect just that. If you could do anything to your home, where would you start?