The monthly average sales price is $549,861 while the annual average sale price is $550,701. This means the average home that closed between August 10, 2022 and September 9, 2022 was $840 cheaper than the average home that closed between September 10, 2021 and September 9, 2022. As recently as June the two averages were separated by almost $66,000, so the gap has dropped dramatically in less than 3 months.

It is never a good sign when the short term average is lower than the long term average. However this is not as uncommon as you might think. It happened briefly 5 weeks ago and also for 3 weeks in 2020 during the panic of the COVID-19 pandemic in late May and early June. We also saw the two averages intersect in September 2019, and during the Autumn of both 2015 and 2014. These were all periods of weak buyer confidence.

The dollar gap between the two averages is a good signal of the state of the market. A negative $840 number is not terrible but far from good. The highest we have ever measured was a positive $79,365 in May 2021 which we can look back on as following a peak in buyer optimism. The worst we have seen was negative $62,429 in March 2009. However reaching a peak and then falling back quickly is a positive signal that we are past the worst - by October 2009 the gap had closed completely.

It will be a more important sign if the short-term average stays below the long-term average for an extended time. A week or 3 is nothing to worry about, but several months means a long-term down-trend has started. This happened between September 2007 and October 2009. It would not be good to relive those years and at this stage it looks unlikely that we will.

Market insights provided by The Cromford Report.