St George Real Estate Housing Market Conditions and Projections
As we enter December 2023, we find ourselves approaching the concluding weeks of what has proven to be a somewhat turbulent year for the real estate market. I hesitate to label it a "bad" year; rather, it has been a corrective period, a return to what we might consider normal. Defining "normal" in this context, I'll use the pre-COVID era as the baseline, as the post-COVID period appeared to be the instigator of the anomaly. During the COVID anomaly, we witnessed a sharp decline in inventory, accompanied by a surge in sales, offering the younger generations a firsthand lesson in the principles of supply and demand in economics.
Today, some individuals anticipate the return of what they consider "normal" interest rates. However, this is where it becomes intriguing. The current interest rates are, in fact, the "normal". The 2-5% rates we enjoyed over the past several years were the anomaly. It's doubtful that we'll witness those low rates again. The past is shaping the present housing situation, with buyers hesitating in the hope of the return of the once elusive low-interest rates. Sellers are divided, with some reluctant to part with their advantageous rates. Some sellers seek to sell at prices reminiscent of a year ago, which is unacceptable to current buyers. Consequently, the market has experienced a slowdown.
Check out this graph. I pulled Greater St George, showing 2019 to the current (November 2023). It's interesting to note that we are quite similar today in active listing and Sold listings as we were back in 2019, with one exception...PRICES. Housing prices are still significantly higher today compared to 2019. It took 2 years for that anomaly to increase; I suspect the decline will happen quicker.