Written by Eric Lowry, Team Leader of The Lowry Team

It's January 2024. It's time for our next housing market update for the Cincinnati & Dayton Ohio area real estate markets.

What's going on in the real estate market, the housing market, whatever you want to call it? I just finished my digging through the numbers as I do every month, to see what's happening. 

I go pretty in depth because I really think it's important for me and our team to understand what's going on in the housing market and I think it's important for you as well. So here we go. Let's dig in. What happened in December of 2023 with sales, home prices, new listings, all of that sort of stuff.

So let's start with home sales in December of 2023. These are closed sales. So homes that closed in December, 2023 versus the same time in 2022.

So we're comparing December to December and what I saw was in most areas that home sales are definitely down, some areas as much as 23.5% compared to the prior year, which is a little concerning. I'm not going to lie because in December of 2022, we were already seeing home sales already falling, and so to be down in a month when it was already down last year means that in December, closed sales were down quite a bit still. 

The one thing we do have to remember is that home sales that closed in December, likely sold in October and November, and back then we were still seeing the heights of the interest rates. So maybe it's not a surprise when you think of it that way, but still a big drop generally speaking compared to 2022

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So onto then home prices, which is really what everybody's kind of watching and thinking about, right?

What happened with home prices in December?  Prices of homes that closed in December were up nearly 10%. The average sale price of those homes that closed in December was up just under 10% when compared to the same time in 2022, that same December month. So that's a big increase. That's much larger than all the experts are predicting for what they think 2024 is going to look like in terms of home sale price appreciation, I've seen estimates from zero, they think sales or prices will be flat in 2024 to most of the experts, if you will, are saying probably somewhere in the 4% to 6% range of increase over last year. And so in December we were up 10 nearly. That means coming into the new year home prices are still hot and there's certainly no indication they're going to come down. There's no evidence of that whatsoever.

Looking at days on market, they were basically the same in December of 2023 as 2022. It was 29 days this year in December compared to 24, 5 days difference, not a huge amount there. 

The List To Sale Price Ratio actually went up this year in December of 2023 compared to that same month again in 2022. Homes that sold and closed in December of 2023, closed at 99.15% of list price, super close to list price. There's not much negotiating going on there! In 2022, it was 98.2, so almost a full percentage point difference there. It's higher now, and that I think reflects the competitiveness of the market still, there's not an overabundance of listings for sale. You know that if you've been looking for a home. I know we are constantly on the lookout, checking multiple times a day for our buyers trying to find those new listings and get out to see them quickly.

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New listings are selling quickly and selling for really close, if not at list price. And we're even starting to see a trend of getting back into that old story, if you will, of selling for over list price. Again, I suspect we're going to see more and more of that as we progress into the true spring market. 

The amount of new listings in December was down a lot. They were down in the 10 to 12% range compared to December, 2022. And I'm not talking about the pricing there, I'm talking about the number of new listings that came on the market. December is always kind of low for new listings, people are occupied by the holidays and all sorts of stuff. So in the natural seasonality of any year's real estate market, December is lower for new listings. But when you compare it to the previous December, again, same thing, it was down 10 to 12%

So we're really still seeing the big overriding thing that's driving home prices is the amount of inventory of homes for sale. It's still very much on the low side right now.  In a normal real estate market where it's evenly balanced, it's not favoring buyers or not favoring sellers. It would be at six months worth of inventory, meaning if no new listings come on the market, it would take us six months to sell off everything. And so right now, basically in real time now, as I'm telling you this, early January, we have one basically 1.3 to 1.5 months worth of inventory, very, very low. Even if inventory starts to pick up, we're not going to get anywhere near a balanced market or a buyer's market for a very long time. Thus, it's very likely that we see home prices continue to appreciate in 2024.