September 2023 Home Sales Decline: Analyzing the Drop

September 2023 Home Sales Decline: Analyzing the Drop-patrickiturra
Patrick Iturra, Asset/Investment Manager & Consulting. October 20, 2023

 

The September 2023 home sales decline has caught analysts and potential homebuyers off guard. Existing home sales, echoing memories of the foreclosure crisis era, have witnessed a steep drop, reaching a pace reminiscent of over a decade ago. What’s driving this unexpected dip in September 2023 real estate sales? The factors are many, and their implications for the housing market could be significant.

A Historical Perspective

To appreciate the gravity of this situation, one must recall that the last time we saw such a drop in September 2023 home sales was back in October 2010. This period was heavily overshadowed by the foreclosure crisis, with a combination of financial calamities wreaking havoc on the U.S. housing market. The figures emerging from September 2023 are a grim reminder of those challenging times.

Inventory Squeeze

The dwindling inventory is a primary factor contributing to this September 2023 housing market downturn. At the month’s end, only 1.13 million homes were available for sale, marking a decline of over 8% compared to the previous year. This tight inventory scenario naturally curtails the number of sales transactions, creating an environment where buyers’ demand exceeds the supply.

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Climbing Mortgage Rates and Prices

Another dimension exacerbating the fall in home sales for September 2023 is the rise in mortgage rates. For many aspiring homeowners, even a modest increase in interest rates can make monthly payments considerably higher over the loan’s tenure.

Furthermore, homes haven’t become any more affordable. The median price for homes sold that month stood at a substantial $394,300, showcasing a 2.8% increase year-over-year. This rising price trend can be attributed to the limited inventory and broader inflationary pressures.

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What Lies Ahead?

In light of the September 2023 property sales slump, several questions arise. Will we see a continuation of this trend, or is it a transient phase? Are we on the precipice of another housing crisis? This could be an opportune moment for those considering a “Flip & Fix” strategy.

With market dynamics currently favoring sellers and a potential surplus of undervalued properties due to the slump, investors may find it profitable to purchase, renovate, and resell at a higher value. However, caution is advised, given the unpredictability of the market’s trajectory. Assessing local demand, renovation costs, and potential return on investment is essential before diving into any project. While it’s challenging to predict the exact trajectory of the housing market, it’s evident that current market dynamics are more aligned with sellers than buyers.

 

 

“Business development enhances a company. My expertise boosts your revenue, growth, and profit through strategic partnerships and decisions.”

“I don’t sell houses. I grow your assets.” –Patrick Iturra, Asset/Investment Management.

Patrick Iturra

Patrick Iturra

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