The slowest sales market in at least the past five years saw an 11.6% dip in homes sold in September from the prior month, and fell 23% short of sales from the same month in 2022.
Heading into the final quarter of the year, when homes sales typically drop off, the local market continues to lag as prospective buyer’s wrestle with higher interest rates, climbing fire insurance premiums and fewer homes on the market from which to choose.
Continuing the same monthly trend seen locally throughout the first three quarters of 2023, western Nevada County saw the fewest homes sold in any September of the last five years.
And the 107 homes sold closed out the worst-performing third quarter since 2018, when a total of 240 homes were sold — including 88 in the month of September.
QUARTERLY COMPARISONS
There’s not much question that sales will slow in the fourth quarter, traditionally the case with the onset of winter and the holiday season.
The question is how slow will this fourth quarter go?
Sales cooled considerably in the fourth quarter of 2022, from 414 units sold in the third quarter to 270 sold in the final three months.
A seasonal decrease was expected, but that marked a 34.7% decrease from homes sold the prior quarter.
To be sure, in each of the three third quarters previous to 2022, local sales saw a significant dip, with even the red-hot sales markets of 2020 and 2021 recording significant slowdowns, with 23.7% and 19.2%, respectively, fewer homes selling in fourth quarter of those years.
The year 2019 saw an 8.4% decrease in sales between its final two quarters.
As mortgage rates soared above 7% in September of 2022, and the inventory of homes on the market decreased, the bottom fell out of the sales market over the final three months.
The question now is whether 2023 will follow a similar path in the final quarter, as rates have risen above 8% and the number of homes locally listed for sale continues to lag.
LIMITED LISTINGS
There were 351 homes for sale in September, the fifth-straight month of a steady stock of properties on the market — though, the fewest homes listed for sale since the sales frenzied markets of 2020 and 2021, when homes were selling in fewer than 10 days on market, on average.
In 2020, there were 886 homes on the market July-September— a monthly average of 288 listings — while there were just 789 listed in the third quarter of 2021.
In comparison, prior to the pandemic, there were 1,828 third-quarter listings in 2019, 536 homes on the market during that same stretch of 2018 and 418 for sale in the third quarter of 2017.
Prior to the previously mentioned 34.7% drop in home sales between the third and fourth quarters of 2022, there were 1,248 homes on the market for an average of 416 homes to choose from each month.
Western Nevada County just closed out the third quarter of 2023 with 1,064 listings, or an average of 354 monthly.
PROPPED-UP PRICING
The median price of a home sold in western Nevada County has climbed considerably in the past five years, recording an all-time monthly high of $592,400 in April of 2022.
Prior to the pandemic-fueled frenzy, the highest annual recorded median price of homes sold in western Nevada County was $474,000 in 2018.
So far, year to date, the median price of home sold in 2023 is $540,000.
As home sales slid in the fourth quarter of 2022, the monthly median price followed, falling from $525,000 in September and October to $499,000 in December. With the turn of the new year and sales slow out of the gate, the median price dropped to $465,000 in January.
But even as 2023 has seen the slowest sales in every month of the past five years, the median price of a home sold in September was still $554,500, as low inventory has helped to create competition for the fewer number of homes that are on the market.
Brian Hamilton is a Realtor (DRE #02149112) for the Betsy Hamilton Real Estate Team at RE/MAX Gold (DRE #01949144) in Grass Valley. Email him at Br***@Be***********.com or visit www.BetsyHamilton.com for more information.
BY THE NUMBERS
September home sales in western Nevada County:
$554,000 — Median price (2023)
$525,000 — Median price (2022)
32 – Days on market (2023)
40 – Days on market (2022)
107 – Homes sold (2023)
139 – Homes sold (2022)
351 – Homes for sale (2023)
389 – Homes for sale (2022)
