We are fully through the first month of 2023. And with that, we have some numbers to share for this week’s Delaware housing market. 

1. Home sale prices have stabilized since January. 

We maintained a $325,000 average sales price without experiencing any significant changes, referring to the closing table average. Our listing median is $357,000. So that is a really good sign, seeing a gap between those two numbers. $357,000 is usually what homes in Delaware are listed for, while $325,000 is what homes are actually selling for, making it to the closing table and going to the new buyer. That’s a really good sign. 

Seeing that difference means people are negotiating, which is a sign of a healthy market. In a normal market, people don’t list a home for the exact price they think they will get. They understand that negotiations are just a natural part of the process of buying or selling a home. 

With that, we had an odd shift just on the last day. This could affect us for the next ten days, and after that 10-day period, it could get worse, but hopefully not.

2. Employment rate went up on the last day of January.

Days on market took a weird flip, but, throughout the most part of January, days on market averaged about 16–18 days, minus new construction. With that being said, interest rates take a shift as well, because throughout January, all the way up until the end, we got as low as 5.98% on a conventional 30-year mortgage. That is so different from what we are talking about. In October, most forecasts predicted that mortgage interest rates would be in the 9–10% range by the end of December. Nobody wanted to see that.

Last Friday, we had a job report. A lot of people got jobs—around 200,000 new jobs. And quite frankly, the federal government doesn’t want that. The Fed is very vocal about its desire for the job market to get worse. They want more people to be unemployed. It might sound rude and mean, but when more people have jobs, more money flows around, and that doesn’t help inflation. People keep spending money. The Fed wants the market under control. 

As a result, interest rates rose by 0.4 percentage points. That’s a big jump. It's most likely not finished yet. There isn't much between now and February 14 that could cause it to be moved. But in the next 10 days, it'll kind of stay in that neutral wave until we get to a big point, when we get to the Fed, when they make its big announcement about what it will or will not do. 

3. The CPI Report on Feb 14 will determine the next month’s market.

It’s also going to line up with the CPI report on February 14. It will provide a content update on inflation and dollar worth, among other things. And when we get that report, the Fed will have comments about it. 

If that CPI report comes back and it is no good, it says, “Hey, we're losing the fight against inflation,” so we could expect interest and mortgage rates to be back at the 7% mark. That’s not to scaremonger; it's the honest truth. If we get back-to-back bad reports, we’re going to see higher interest rates. For those who secured a home under the 6% range, be grateful because it may go up in the next few months. 

But don't worry; if we get a good report, it will return to normal. As of right now, the Delaware market is growing. We have a lot of out-of-state buyers coming in from all walks of life—New York, New Jersey, Pennsylvania, Baltimore, and other nearby states. There’s just more than your dollar can buy in Delaware than in other, more expensive states; that’s why Delaware remains an attractive option to move into. 

It’s also the reason why Delaware can’t see a market crash coming, especially when the federal market is doing well. Because Delaware has a scarcity of dirt, sand, and land, this scarcity will drive up home prices as the influx of people continues. Because of the high demand and low supply, home prices are likely to rise.

Other Important Metrics

As for the other data, it’s still $305,000 for average home prices in Kent and $320,000 for the entirety of Delaware. There have been no significant market drops, and we sit at 6.4% on mortgage rates. We’re just waiting for the next 10 days for the CPI report and how the Fed will react to it. 

And that wraps up our market update for this week. Stay tuned for updates next week!