What does 2024 look like?
Despite the challenges of a harsher market, Q4 of 2023 experienced a 3% increase in sales listings compared to 2021, with three-bedroom properties dominating at 37% of listing share. The shift in property sizes suggests potential downsizing trends or changing preferences.
However, sales agreed levels underperformed on what we have been used to in the past, ending Q4 with an 18% decrease compared to 2021, mainly due to the cost of living crisis and interest rates having an impact on affordability.
Both fall-throughs and reduction numbers improved in Q4, signalling a more realistic approach to pricing and indicating a slower market where buyers have more time to consider purchases. With that in mind, the average number of days on the market has increased.
Regionally, variations in price reductions and sales-to-listings ratios highlight differing market performances. The South East, East, and South West are taking longer to adjust to the market changes, while Wales and the West Midlands outperform in sales. Rural areas experienced a 1% decline in property prices, possibly indicating the end of the ‘race for space’ we saw following the pandemic.
In conclusion, this quarter we have started to see the market stabilise after a turbulent 3 years. In addition, we are starting to see buyers and sellers get used to higher interest rates being the new normal.
Predicted New Listings for 2024, Q1
In Q1 2024, we expect around a 25% increase compared to Q4 due to a post-Christmas uptick in activity as is usually seen this time of year. Overall, listing prediction levels have been roughly within 5% of actual levels giving confidence that 2024 will start the year similar to last year with a healthy number of new listings.
April 6th was the most popular listing date of 2023, in line with most other years where the highest listing days were in early April. Approximately 40% of listings have sold this year, with another 25% still on the market.
In November, property price reductions saw a substantial decline, plummeting by 26% compared to the previous month. This drop is likely due to the rebalancing of house prices.
Early 2023 saw twice as many price reductions as the year before as the gap between seller expectations and actual house prices was significant. Now, the number of price drops has finally fallen below 2022 levels suggesting sellers are more realistic in their approach, starting to price right the first time.
Furthermore, analysis reveals that 28% of property listings that underwent price reductions in the current year had reduced their prices more than once. This demonstrates the market of 2023, where pricing was a constant sticking point and the imbalance between expectations and reality resulted in multiple price drops.
It seems these times might be coming to an end, Q4 figures suggest reduction levels might be returning to more stable levels. Looking into 2024, we hope to see fewer price drops and a more level approach to pricing.
Content courtesy of Spectre. Product related figures and static market sales as of 31/12/23.