According to HAR, total active listings, or the total number of available properties, increased 55.2 percent to 33,776. December sales of all property types totaled 7,634, down 34.5 percent compared to December 2021. As a result, the absorption rate for December 2022 was 23 percent. Although still very strong by historic standards, this is down considerably from the high absorption we have seen over the past 2 years. However, Homes were still more likely to move than back in November when the absorption rate was 20 percent.
The Days on Market (DOM), or the number of days it took the average home to sell, rose to 57 days in December, up from the 37 days on market we saw last December.
Inventory levels fell from the 2.9 months of supply we saw in November. However, they are up considerably compared to 2021. At the end of December, we had a 2.7-months supply of available homes. In December 2021, we only had 1. 4 months. Housing inventory nationally stands at a 3.3 months supply, according to the latest report from the National Association of Realtors (NAR).
A 6.0-month supply is generally considered a “balanced market". By historic standards, we are still in a Seller's market, but buyers are definitely finding a few more options than at any time over the past 2 years.
As predicted in our 2023 Houston Real Estate Outlook, we are seeing a little spike in demand now that the new year has begun. This has been driven by falling mortgage rates and the strength of the Houston economy. If mortgage rates continue to fall, even modestly, over the coming months and the Houston economy remains resilient, we are probably looking at a fairly strong 2nd Quarter and higher prices. If you have been thinking of selling in 2023, spring might be a good opportunity for you to sell. If you are a buyer, you may want to move up your timeline in February or March so you can get in before prices start to rise.
Regardless talk to a professional so you can get advice to determine if this year is the right time for you. Contacting a Norhill Realtor is a good place to start. Get connected with one of our experienced agents who can talk you through the market in the neighborhoods you care about as well as discuss the timing for either selling or buying.
Norhill Realty provides expert real estate services to residential buyers and sellers in Houston and surrounding communities. Contact us today for more information on Houston real estate and for professional assistance navigating this sometimes complex home market.
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