2022 began where 2021 left off: Mortgage rates were near historic lows, buyer competition was fierce, and homes were selling at a breakneck pace, often with multiple bids and all-cash offers, due to pent-up demand and a shortage of housing supply, causing sales prices to soar to new heights. But all that changed a few months later as mortgage rates began to rise, adding hundreds of dollars to monthly mortgage payments and causing housing affordability to plummet to its lowest level in decades. As borrowing costs continued to increase, home sales and home prices began to slow, and after two years of record-breaking activity, the red-hot housing market was finally cooling.
Sales: Pending sales decreased 26.7 percent, finishing 2022 at 5,569. Sold listings were down 26.5 percent to end the year at 5,617.
Listings: Comparing 2022 to the prior year, the number of homes available for sale was down by 28.6 percent. There were 653 active listings at the end of the year. New listings decreased by 11.0 percent to finish the year at 8,223.
Prices: Home prices were up compared to last year. The overall median sales price increased 0.8 percent to $1,450,000 for the year. Single Family home prices were down 0.9 percent compared to last year, and Condo/TIC/Coop home prices were down 0.8 percent.
List Price Received: Sellers received, on average, 108.2 percent of their list price at sale, which remained unchanged from last year.
Home sales continued to decline throughout much of the year, as affordability challenges took their toll on market participants, forcing many prospective buyers and sellers to the sidelines. To help offset rising costs, some buyers moved from bigger, more expensive cities to smaller, more affordable areas, while others turned to the rental market, where competition and rental prices surged. As mortgage rates continued to climb and market conditions shifted, many homeowners were reluctant to sell their homes, and with buyer demand down, homebuilders eased production, further constraining an already limited supply of housing.
Looking ahead to 2023, much depends on inflation, mortgage interest rates, and the broader state of the economy, although economists predict many of 2022’s housing trends will continue into the new year: home sales will soften, price growth will moderate, inventory will remain tight, and there will be greater variability between markets nationally, with some regions possibly seeing price declines while other, more affordable areas of the country remain in high demand and experience price growth.
