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2023 Real Estate Wrap-Up

By Chip Collins

Market Stats, Perspectives, and Insights from 2023

2023… The market year highlighted by three I’s: Inventory, Interest Rates, and Insurance, all of which shaped client discussions, decisions, and directives over the course of the year. 

Despite these challenging elements, the Lowcountry experienced a strong overall market, yielding year-over-year increases in both Median and Average Sales Prices. In fact, with a strong finish month in December, the market-wide Average Sales Price jumped to $696,294 (a 3% gain over 2022), while the Median Sales Price crested nicely over $500,000, settling in at $516,500, posting an impressive 8.4% increase from 2022.

While single-digit price gains might not seem like much to highlight, the reality is that a certain segment of the market was expecting prices to fall off after the stunning jump in values that occurred during the pandemic market. But that simply didn’t happen… And, we even saw a couple of historically high $9 Million+ sales that further highlighted the value-confidence in the Lowcountry that persisted throughout 2023.

This strong value-confidence, coupled with a steady presence of buyer demand from a vastly growing audience, led to continued “inventory frustration” as the number of New Listings to hit the market dropped 7.3% in 2023.  

In turn, the number of Pending Sales dropped 9%, while the number of Closed Sales dropped 7.5% for the year compared to 2022.

At the end of December, the total Inventory of Homes for Sale was UP 23% from the end of 2022. So, despite a decline in the number of new listings hitting the market amid steady demand, the year ended with a higher surplus of inventory that hadn’t yet sold. This surplus grew throughout the 2023 calendar year – not all at once – reflecting the gradual effect of buyer discernment, interest rate affordability, and the decline in overall sales.

Related, the Days on Market Until Sale jumped 33% over what we saw in 2022, which means that the market took, on average, considerably longer for inventory to get purchased than in the previous year. We expect this stat to continue to grow in 2024 as it takes longer for some inventory types to get absorbed.

The net result of a growing overall inventory with longer time on market resulted in more negotiability between Buyers and Sellers. On average, the Percent of List Price Received on deals that closed in 2023 dropped to 98.1%. Because we are seeing a growing number of price adjustments in the market (especially compared to the pandemic market, when a “price drop” was basically unheard of), the Percent of ORIGINAL List Price for 2023 closed deals was closer to around 96%. 

With the continued leveling-out of seasonality in our year-round marketplace, we saw a pretty steady pattern of both New Listings and Pending Sales as shown on the graph above. The two trend lines maintained a strong correlation throughout the year, which demonstrates an overall healthy market.

Buyers in 2023 regained some footing as they experienced more negotiating leverage amid a growing overall inventory… and they turned more selective last year as well. Buyers were more reliant on “supportive data” when it came to considering a property’s fair market value, and they were increasingly discerning about the condition of properties they considered. The net result was that over-priced properties and properties that needed significant updates tended to be overlooked, and those properties either sat on the market until they were repositioned, at a different price, or they remain on the market today.  

Meanwhile, Sellers in 2023 realized that Buyers weren’t as willing to pay “just any price,” requiring them to be more diligent and focused on their pricing strategy and/or condition strategy. Those who launched a good property at a good price often found themselves benefiting from strong interest right away, many times resulting in multiple interest/offers, much like we saw in 2021 and 2022. Sellers also found themselves getting reaccustomed to a more traditional real estate contract, which often affords Buyers contingencies for inspection, financing, and appraisal.

At Collins Group Realty, we ushered 285 clients through the ins and outs of varied terms, transitions, and transactions, learning and guiding all the way.  The year presented as many opportunities as it did challenges, a good many of which we address in our Steering Factors section of this market analysis. 

Starting right away in the first few weeks of January, we have been encouraged by the high level of activity that kicked off the new year, which, through time, has often served as a bellwether for what we can expect in the year ahead. Buyers and Sellers alike are steadily entering the market with confidence, and we feel optimistic about how 2024 will unfold.

To see how each community performed in the 2023 market, including price trends, average days on market, as well as more detailed graphs for the data above, take a look at our Annual Real Estate Market Analysis for 2024.

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