January 2023 saw demand crater compared to the highs of early 2022, but prices continued to rise with sizable jumps in nearly every locality. Units sold is the big story for this past month with more than 35% fewer homes changing hands than last year. January 2022 saw 468 units sold while this January saw a drop to 303 homes. Despite falling demand, prices continued to rise with a 6% year-over-year increase from $396,000 in January of last year to $419,900 in January of this year. Total sold dollar volume was down 30%, going from approximately $202,6 million last year to $142,4 million this year.
The decline in demand was most pronounced in the counties of Caroline, Orange, and Stafford, with Caroline posting a 50% decline in homes purchased. Supply continues to remain constrained so interestingly, prices skyrocketed in Caroline at the same time, posting a 35% gain from last January with a median price of nearly $400,000. Orange County posted a 41% volume decline but also saw prices increase 9%. Stafford County saw a whopping 42% decline in sales but still managed to post a 6% increase in median price.
FAAR Board of Director Randy Walther comments, “Overall the market is surprisingly stable. If it’s on the market, it sells. Very few properties are slow to sell but buyers seem to have regained some leverage. There is more negotiation between the parties than there was six months ago, and sellers are more open to some concessions to close a deal. The market is not frantic and that is beneficial to both sides. Sellers seem to have more confidence that if they sell there will be something out there for them to buy. On the other hand, buyers are more confident that they will find a suitable home even if it’s not their first choice. Interest rates have peaked and are starting to fall, which bodes well for an active spring market.”
Days on market, the time it takes from when a listing enters the market until it receives a ratified contract and is removed from active status on the multiple listing service, increased 46% up to 38 days this January compared to 26 days last year. This is a big difference from the consistent lows we were seeing with averages of about 5 to 10 days on market for most of 2020 through mid-2022. The additional time from those lows gives buyers a little more breathing room to make purchase decisions.
Inventory is up nearly 50% from the historic lows of the last few years, finishing out the month with 722 active listings compared to just 484 last January. New listings remained nearly constant with a slight 3% increase over last January while new pendings declined by about 6%. Walther continues, “Winter is traditionally a slower time in the market and spring seems to hold promise for both sides of the transaction. All indications point to an active market for the foreseeable future. Once again, it shows the resiliency and strength of the Fredericksburg region.”