In the second quarter of 2023, the inventory of homes experienced a substantial increase, rising nearly 50%. This growth was observed across all price bands, with the most significant percentage surge (224%) occurring in homes priced between $250,000 and $300,000.
Around 40% of the home sales during this quarter were on average 4% below the listed price. This represents a significant increase in sales below the list price compared to the same period in 2022, which accounted for only 15% of sales with a reduced price.
Sales declined in all home price bands except for the $650,000-$800,000 range, which saw growth. The most considerable drop in sales (38.4%) was observed in homes priced between $150,000 and $200,000.
Monthly unit sales in 2023 were lower than the levels in 2021, 2022, and the three-year average. Additionally, the Average Days on Market significantly increased to 32 days, marking a fourfold increase from the 8 days reported in the second quarter of 2022.
During the same period, the overall consumer inflation rate fell to 3.0% in June, which is lower than the rates recorded in 2022 (8.0%) and 2021 (4.7%). The inflation rate has been on a declining trend since peaking at 9.1% in June 2022 and is heading toward the Federal Reserve’s target of 2%. The average inflation rate for the second quarter of 2023 is 4.0%, showing a 54% decrease from the second quarter of 2022 average (8.7%) and a 31% decrease from the first quarter of 2023 average (5.8%).
The national average 30-year mortgage rates increased from 5.34% in the second quarter of 2022 to 6.71% in the same period of 2023, according to Freddie Mac’s weekly data.
Madison County experienced a 3.1% increase in its workforce, growing from 196,908 in 2022 to 203,022 in 2023.
The months of supply of homes increased across all price ranges compared to the second quarter of 2022. The overall months of supply rose to 2.3 months for all homes, which is 156% more than the 2Q 2022 level. However, it is 21% less than the prior quarter, which reported a 2.9-month supply.
Despite these market changes, total units sold continued to decline in the second quarter of 2023 compared to the levels in 2019, 2020, 2021, and 2022. It is also 15% below the three-year second-quarter average level.
Overall, the real estate market experienced fluctuations due to various factors, including changes in inflation rates and mortgage interest rates.
To view or download a copy of the Q2 Real Estate Economics Report, click here.