Average home prices continue their moderate decline, according to the latest from the Case-Schiler National Home Price Index, but in many of our operating markets, we're seeing price stability and resilience that bucks the nationwide trend. John Burns, meanwhile, predicts that SFR rent growth will hover around 2% for 2023 as rent-to-income ratios hit all-time highs and new BTR supply hits major metro areas. A more bullish Zillow Research Group suggests rent growth will average out to 5.3% for the year.
Overall, indicators in our top SFR markets confirm that the market is softening, but regions with persistently strong demand show some early hints of a rebound. We anticipate January data will be the critical bellwether for the direction and rate of price movement and rent growth in the months to come.
NOTES ON THE DATA SET
Aggregate market data comes from 10 of our operating markets: Nashville, Charlotte, Atlanta, Birmingham, Huntsville, Tampa, Jacksonville, Orlando, Kansas City, and Greensboro. Inventory and price data include single-family residences, townhomes, and duplexes with 2+ bathrooms and 3+ bedrooms priced between $150-$500K.
Across the board, markets are softening as sellers realize they need to cut prices to close deals. The most recent average (across all markets) shows closings are 96.18% of original list price, down from 100.64% during the same period last year.
Although the sale-to-list price ratio is trending downward in all markets, specific markets differ in the extent of their softening. Kansas City displays a strong 98.01% sale-to-list price ratio compared to Orlando’s 93.08%.
Despite sellers cutting prices, homes continued to stay on the market longer during the winter months. Towards the end of December 2021, the average DoM was 39, but 2022 saw an average 56 days for the same period. Seasonality plays a role, certainly, but the delta this year is compounded by cautious buyers.
Days on Market in all of our spotlight markets trended higher in December 2022 compared to the same period in 2021.
Spotlight markets: Atlanta (ATL), Nashville (BNA), Charlotte (CLT), and Kansas City (MCI)
In aggregate, we see a plateau starting in October 2022 (given low market activity in winter months, this is expected), but compared to the same period in 2021, prices are $10k higher.
While prices remain largely stable in aggregate, Nashville and Kansas City ended the year with slight list price increases ($1.5k and $4.01k, respectively). Did these markets already hit their bottom? Stay tuned for our January read-out to see which markets, if any, follow suit.
Spotlight markets: Atlanta (ATL), Nashville (BNA), Charlotte (CLT), and Kansas City (MCI)
Market data brought to you by the Market IQ team
Our team is here with the data you need to make your own assessment of this shifting landscape. For more in-market observations or a complimentary strategy consultation, please reach out to James Newgent at james.newgent@pickethomes.com.
Head of Business Growth and Realty Services
Technical Project Manager, Picket IQ
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