Local Market started to rebound

[Carlos Ptriawan]

I'm trying to continue the good discussion on the "Housing crash" thread that @Greg R. created few months ago and had the number one posts in the history of BP including a very insightful post from @James Hamling. But instead of predicting a crash, it seems the market, at least here locally,starting from January market seems to be warmer again. 

Open House is full of people, DOM is within 2-3 weeks, the price reduction is getting smaller, started seeing a price increase, and sold price with above 
listing is reaching a new high. But not sure about other markets. This is very different than Dec. 2022. 

Looking at the sold price, I found the following algorithm is still working to predict the sold price in our market.
Find the baseline price in 2013, and add between 5-6% every year as appreciation, the range of sold price in 2023 is within 1 sigma deviation of 2023 value. 

I guess in 2023, we will have the following trends:
- stong market rebounds in few appreciation market , in relative to liquidity supply.
- cash flow markets like OH,AL would be the highest/leading this appreciated market for few years (I I know Milwauke is reaching 20% appreciation in 2022).
- but there would be a crash, eventually in a market where STR is saturated
- there could be a crash in the CRE market, esp class A/B MF that started the syndication in 2019 and has to pay their balloon payment this year

[Steve K.]

Same here, we've got multiple offers on many listings again, and select properties selling for up to 25% over asking price. Not quite as crazy as last year, but still very strong seller's market with very low inventory. This all just started suddenly last weekend, we saw higher DOM's from Nov-Jan. which is in line with our typical (pre-Covid) seasonality. It seems buyers are coming back after the Holiday doldrums quicker than sellers. We'll see if this continues but with interest rates stabilizing in the 5's, and a historically low inventory environment it seems like the brief window where buyer's could dictate terms is closing. Unless A LOT more inventory comes on the market in the next few months, we'll see another competitive spring for buyer's, resulting in steep appreciation.