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Tuesday, February 21, 2023

The Normal Seasonal Changes for Median House Prices

by Calculated Risk on 2/21/2023 02:17:00 PM

Earlier, in the CalculatedRisk Real Estate Newsletter on January existing home sales, NAR: Existing-Home Sales Decreased to 4.00 million SAAR in January, I mentioned that the median price was down more than normal seasonally.

Below is a table of the seasonal changes from annual peak to the following January over the last several years (all prices Not Seasonally Adjusted, NSA).

Seasonally prices typically peak in June (closed sales for contracts signed mostly in April and May).

And seasonally prices usually bottom the following January (contracts signed in November and December).

Peak MonthJuneJuneOctJuneJune
To following Jan-8.9%-6.7%-3.0%-3.4%-13.2%

In 2020, prices increased late into the year and only declined slightly seasonally (the start of the pandemic buying boom), and in 2021, median prices only declined about 3% from peak to bottom.

But the decline from the 2022 peak to January 2023 of 13.2% is larger than in the pre-pandemic years. And we will probably see further price weaknesses, putting median prices down year-over-year soon.

Last year, closing median prices increased 2.7% in February, 4.3% in March, 4.3% in April and 3.3% in May, all NSA.

If median prices are up less than 1.3% month-to-month in February 2023, median prices will be down year-over-year!