The Real Estate Corner with Rick Seese: May 2023 Edition

Rick Seese has more than 40 years experience working in real estate market, and each month, he shares the latest news and outlook for Lowell-area housing market.

May 2023 Edition

-My Perspective – Are We There Yet?
-The Latest Area Market Statistics
-Monthly Summary – What Does All This Mean?

My Perspective – Are We There Yet?

I find that to be an interesting question on many levels. Most of us have experienced our children or grandchildren asking that question during a destination trip, mostly because they are either excited to get there or they are bored from being in a vehicle for what they deem to be a lengthy period of time. When it comes to economics, and the increasing interest rates, the saying has a few different meanings, but yes, we are excited to have it end, and we are tired of the lengthy trip to get there.

Presently, the question is mostly about inflation and/or interest rates. Those answers can probably come from the latest reports on the Federal Reserve’s (FED) inflation fighting progress. Overall inflation is at its lowest in two years at 4.9%. However, core inflation, which measures everyday consumer goods and services (food, utilities, housing, fuel, clothing, etc.), is at 5.5%. There has obviously been progress, but the FED has a target to move levels back down to around 2%. Well, we aren’t there yet, so keep your seat belt buckled, as we may need some additional interest rate hikes to finish the job. The current mortgage interest rates are around 6.5% for a 30-year fixed, and 6.25% for a 5-year Adjustable Rate.

As for housing, the current spring market is not yet delivering additional inventory for additional buyer choices. We have seen additional listings, but not as many new listings as during previous early spring markets. Interest rates are not necessarily slowing buyers, low inventory is playing a major role in less pending sales. Historically, the above chart shows us how interest rates have changed over the past 50+ years. In perspective, current interest rates are still at the lower end of history, especially comparing the peak of October 1981 at 18.6%. Don’t worry, we won’t get anywhere near there. That was an old trip, in an old vehicle.

However, if we are in for additional FED inflation fighting medicine with additional hiking of interest rates, we might as well enjoy the scenery, as this trip is going to last a little longer. Check out my monthly statistics below as you can see where average sale prices continue to rise from lack of inventory; we have less than normal new listings hitting the market; months of supply continues to be historically low; and demand continues to be slower. Keep in mind, mortgages are the way to homeownership for most Americans. When interest rates dip lower, we refinance.


The Latest Housing Statistics


We are comparing the current 12-Month Rolling Average Sale Prices with the final 2022 Average Sale Prices within our surrounding focus area school districts. All our focus area school districts are currently above 2022 ending prices, except Forest Hills. Over the past month, the Entire MLS experienced a slight decrease in Average Sale Price of $305 from last month. The Lowell School District had an increase of $7,285 from last month. All our focus areas had increased Average Sale Prices from last month, except Forest Hills and Lakewood.

Here are the 12-Month Rolling Average Sale Prices for our Surrounding Townships through April 2023. The Lowell School District takes up a portion of each of these townships, except Vergennes and Lowell, where the entire townships are totally encompassed by the Lowell School District. Half of our focus area townships had increases in Average Sale Prices over the last month (Vergennes, Bowne, Grattan, and Boston). The other half experienced declines in Average Sale Prices (Ada, Cascade, Lowell, and Keene). The Entire MLS had a slight decrease, as stated in the previous chart. This chart shows us a bit more of current geographic values, rather than school district values.

Homes Currently for Sale – The Entire MLS Homes Currently for Sale increased slightly over last month. On a seasonal basis, the increase should have been larger when comparing previous years. Caledonia, Rockford, Lowell, and Lakewood School Districts had increases of homes for sale from last month. Forest Hills and Belding had decreases.

Months of Supply – “Months of Supply” refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace. Historically, five to six months of supply is associated with moderate price appreciation, and a lower level of month’s supply tends to push prices up more rapidly. The “new normal” may be closer to four to five months of supply.

Except for Caledonia and Lowell School Districts, all our focus areas have less than 1.0 Month of Supply. The Entire MLS increased slightly from 1.2 months to 1.3 Months of Supply over the past month. The demand continues in our focus area school districts despite higher interest rates, although at a slower pace. So far, the 2023 spring market is underperforming when compared to 2022.

New Listings – All our focus areas experienced decreases in New Listings when compared with the same period last year. The Entire MLS had a large decrease in New Listings when comparing April 2022 to April 2023. Lowell experienced a decrease from 34 New Listings in April of last year to 27 this year. It’s difficult to satisfy buyers when the inventory is not there.


Pending Sales are sales under contract with an accepted offer, but those transactions have not been finalized yet (closed).

Overall, the Entire MLS saw another year-over-year decrease in April from 3,030 units in 2022 to 2,219 in 2023. Additionally, all our focus area school districts posted decreases from the past year, except Belding. There were increases in Pending Sales over the past month in Belding, Lowell, and Caledonia. All the other school districts had decreases from last month.

We will continue to watch this chart closely, as we enter deeper into the spring market.

May 2023 Monthly Summary

What does all this mean?

Our monthly charts tell us that the lack of inventory of available homes continues to affect the number of homes sold. The demand continues to increase with the seasonality of the spring market, but homebuyer choices remain low. Multiple offers for lower to medium priced homes continue in higher demand areas, which is helping support and stabilize higher sale prices.

As the FED ponders more interest rate hikes to beat down inflation, they are weighing the risk and reward factors of such actions. Headway has been made to reduce inflation from its peak levels, but still not where the FED wants it to be. Can the current interest rate levels continue to get us there, or does the FED risk more rate hikes that could send us into recessionary effects and possibly do more harm than good? My guess is that we need another increase to keep us on the path and further subdue the inflation levels, especially core inflation. Therefore, sit back and enjoy the ride because we aren’t there yet.

Rick Seese works with buyers and sellers of residential, commercial, and industrial real estate. He is an Associate Broker with Greenridge Realty, Inc. and has been licensed full-time for over 40 years. If you’re interested in reaching out to Rick for more information, or have a question for the monthly article, you can contact him via email ([email protected]), visit his website at or Facebook page or call/text him at 616-437-2576.

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