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Inflation and a floundering economy have brought rising interest rates which has cooled both buyer demand and seller listing activity. When you combine rising interest rates and continuing rising prices, we get a significant adverse effect on affordability thereby softening demand. Would be sellers are reluctant to list their homes that have a lower interest rate mortgage, then buy a home at a perceived inflated price with a new, higher interest rate mortgage. These factors are keeping would be sellers from entering the market thereby keeping inventory levels very low. The following 2 graphs illustrate the number of sales on a quarterly basis and the rate of year over year change. The 3rd quarter 2023 number of sales, 279, comes in at 14% fewer sales than in the same quarter 2022.

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The 3rd quarter median sale price comes in at $700,000, up .5% from the 3rd quarter 2022; virtually unchanged from the same quarter in 2022 but reversing the downward trend we were experiencing. Demand has softened slightly. I don't foresee any real crash in values because of the extremely limited inventory and high desirability of the Central Coast region. Property value appreciation is predicted to be flat to small changes up or down through 2023.

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The graph below shares 8 industry organizations' forecasts for 2023 prices and their revised forecasts made mid-2023.

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The absorption rate graph above still shows we're in a sellers' market but what's apparent is we were in a very tight sellers' market as we entered 2022, eased up over the first half, began to tighten again through the last half of the year, and showing signs of softening over the last 6 months.

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The number of new listings is down 11% when compared to the 3rd quarter of 2022.

The median list price of new listings is up 8% over the same quarter of last year.