The performance of real estate in Whitney Ranch during the 3rd quarter of 2022 reveals the start of a shifting market dynamic. The remarkable velocity seen over the past two years have resulted in explosive appreciation combined with a very tight supply of available listings. These conditions, fueled by historically low interest rates and the increasing acceptance of a work from home lifestyle, have allowed Whitney Ranch to see unparalleled growth over this period.
The last 90 days have seen a dramatic cooling in the quantity of sales though prices have not yet shown much, if any real erosion.
Total sales fell by almost 70% from 47 to just 15 as compared to Q3, 2021, arguably the apex of the post-COVID real estate boom. Conversely, pricing has soared, increasing 22% year over year to an average of $1,077,000; the first period for which average pricing exceeded $1,000,000.
Price per square foot rose proportionately during this period from $319 to $363. Perhaps evidence of the slight cooling at play, the most recent quarter saw days on market increase from 10 to 29.
Pricing is often the final indicator of shifting market conditions as patient sellers who are protecting a meaningful amount of equity prefer to wait out discerning buyers rather than cut price aggressively. As a result, days on market accumulate, total sales decline, and prices generally remain stable.
Interestingly, the profile of the typical home sold in Whitney Ranch has grown less modest over the last year despite warning signs in the economy. The average home transacted during this period grew from 2,634 last year to 2,887 square feet. As well, the average bedroom count grew from 3.52 to 3.64 while the vintage of home changed from 2015 to 2017.
As well, the percentage of home sales greater than $1,000,000 soared in Q3 2022 during which 42% (6 of 14) homes eclipsed this benchmark including the first ever home sale greater than $2,000,000. In Q3 2021, just 20% of all sales exceeded $1 million (9 of 47).
On the horizon, conflicting forces are at play in determining where values go. Inventory, though up from the historical lows, remains balanced and sellers are feeling the absence of distress when looking to liquidate. However, the rapid rise of interest rates and a general sense of price saturation is creating a major challenge for affordability.
The more macro factors may have a slight advantage leading to a leveling or slight decrease in values in the months to come however there do not appear to be major storm clouds that would challenge the benefit of purchasing when the right property becomes available.