Market Update December 2022
Westlake Village, Agoura Hills, Oak Park, Thousand Oaks and Newbury Park
By: Michael Rice | December 2, 2022
Released December 2, 2022
My View From Inside
It’s December which means it’s time to forecast what’s in store for the real estate market in 2023.
Price Volatility – Price volatility is the name of the game right now. With so few sales, it only takes a couple of outlier sales to skew the numbers in either direction. Conejo Valley home prices were down 7% in November to a median price of $944,000.
The California Association of Realtors forecasts that home prices will drop 8.8% next year. However, the suburbs are the main beneficiary of the flight from the cities which is why the Conejo Valley will likely outperform state averages next year while many of the major cities will see declining prices.
Low Inventory – The inventory of available homes dropped below 300 for the first time I can remember to just 276 homes for sale. For an area with about 150k residents, that’s scary low inventory which is why home prices are relatively stable. Low inventory will continue in 2023 as homeowners don’t want to sell and give up their low interest rate unless they have to (meaning a job transfer, divorce/financial reasons, or death).
Lower Interest Rates – Mortgage rates are expected to drop in 2023. I’ve yet to find a credible source forecasting anything other than a drop in mortgage rates next year.
The Mortgage Bankers Association is forecasting mortgage rates to drop to 5.3% next year.
“A so-called conforming home loan – probably will peak in the first quarter at a 22-year high of 7% before dropping to an almost two-year low of 5.8% in the final three months of 2023.” – Wells Fargo Economists
Bottom Line…
Fewer homes will sell in 2023, prices will remain relatively flat for at least the first half of the year sustained by record low inventory. Mortgage rates are forecast to drop later in the year which is expected to lead to the return of bidding wars and price appreciation going into 2024.
If you’re on the fence about buying in the short term, early 2023 is the time to jump in before prices begin to surge once mortgage rates ease. You’ll likely end up with a home at a lower price and the ability to refinance at a lower rate once rates drop.
What to expect moving forward
- Expect a very slow month of December for new listings since most sellers will wait to list in the new year.
- And sellers with older listings are more open to negotiation, hoping to sell before the end of the year.
- Expect bargain shoppers to be out in full force looking for deals from motivated sellers.
- Expect mortgage rates to flatten out as most of the expected Fed rate increases are already priced into today’s rates.
Seller’s Corner
The recent drop in mortgage rates and record low inventory is skewing the market back towards sellers ever so slightly. However, it’s still critically important to price your home correctly from the beginning. Buyers are eagerly waiting to pounce. If you miss that first window to attract a buyer, you may have a tough time getting them to come back again once you inevitably drop the price.
What's The 2023 California Forecast?
According to the California Association of REALTORS
- The median price of a home is expected to decrease 8.8% in 2023.
- The number of home sales is expected to decrease by 7.8%.
- Interest rates are expected to average 6.6% in 2023.
Market Snapshot
Prices
- The median price of a Conejo Valley home was down in November at $944,000.
- That’s now 1 consecutive month down.
- Prices are down 7% from $1,014,500 last November.
- And down $106,000 from last month.
Homes for Sale
- November ended with 276 homes for sale.
- Down 20% from last November.
- That’s 67 fewer homes than last year.
- And 56 fewer homes than last month.
Days to Sell a Home
- It took 45 days on average to sell a home in November.
- Down 8% from last November.
- That’s 4 fewer days than last year.
- And 0 more days than last month.
