Housing Market Expected to Heat Up!

Housing Market Expected to Heat Up!

 

Key Findings

The Market Outlook from the REALTORS® Confidence Index for buyers and sellers continued to gain positive steam in December 2023:

• 33% of respondents expect a year-over-year increase in buyer traffic in the next three months, up from 16% one month ago and up from 12% one year ago.
• 25% of respondents expect a year-over-year increase in seller traffic in the next three months, up from 12% last month and from 9% one year ago.

With supply still limited relative to demand, 16% of homes sold above list price, down from 19% last month and flat from 16% a year ago:

• 56% of respondents reported that properties sold in less than one month. Down from 62% a month ago and flat from 57% in December 2022.
• Homes listed received an average of 2.4 offers, down slightly from 2.6 offers last month and up slightly from 2.2 offers in December 2022.
• Due to the lack of housing inventory, the pace of the market, and the use of technology, 9% of buyers purchased a home based only on a virtual tour, showing, or open house without physically seeing the home. Up from 6% one month ago and one year ago.

Contracts typically closed in 30 days, the same as last month and one year ago. But some faced delays or termination:

• 5% of contracts were terminated in the last three months, about the same as one month and flat from one year ago.
• 16% of contracts had delayed settlements in the past three months, the same as last month and down slightly from 17% a year ago.
• 6% of contracts had delayed settlement due to appraisal issues, down slightly from 7% last month and flat from one year ago.

First-time buyers represented 29% of buyers, down from 31% in November 2023 and December 2022. Among all buyers:

• 16% purchased for non-primary residence use, down from 18% last month and flat from last year.
• 5% were purchased for vacation use, unchanged from one month ago and one year ago.
• 1% of sellers sold to an iBuyer, down slightly from one month and one year ago.
• 2% of sales were distressed, up slightly from one month and one year ago.

Contract activity remains competitive:

• 29% of buyers had all-cash sales, up from 27% last month and up slightly from 28% in last year.
• 24% of buyers waived the inspection contingency, up from 18% one month ago and flat from one year ago.
• 15% of buyers waived the appraisal contingency, down from 19% one month and 18% one year ago.

Buyers continue to look outside of city centers for the majority of their activity at 85%.