As 2022 came to a close it became clear that it was a year of transition from the booming markets in 2021 and early 2022 to a more normalized market in late 2022. Many factors came into play throughout 2022, mainly the Fed’s dramatic increases to historically low interest rates, shifts within the stock market, and leveling of buyer demand. Our market continues to benefit from low inventory, allowing for overall property value to remain stable. While 2022 brought about the end of frenzied purchasing, it did increase opportunities for buyers and sellers to find common ground.
Q4 2022 was very reflective of the year as a whole, with a decrease in the number of properties sold, but gains seen in average and median sales prices compared to a year ago. This trend shows the strength and stability of the value gains since 2020 and the continued attractiveness of our area. In Q4 2022 the average final selling price was 99% of the last listed price. In 2022 this percentage never went below 97%, which happened in Q3. Smart pricing has become the cornerstone of our market, those holding on to the heights of the market will continue to see days on the market increase. Whereas correct pricing from the start or strategic price improvements, after having tested the market, will result in faster and higher recorded sales. Sellers employing these methods will still get plenty of value out of the sale of their property.
While interest rates have stabilized from the highs seen in Q3 and Q4, they remain much higher than a year ago. The Stowe market is somewhat isolated from the rate hikes, at least within the luxury market north of $1.5 million, but below this threshold, the rates do have an impact on buyers' purchasing power. There is a more significant impact on sales from rate hikes at lower price points in our broader market. This was evident in the slowdown in transactions towards the end of 2022. As buyers adjust to the new rate reality we expect them to reevaluate, refocus and commit to purchasing, as we have seen in past markets with similar mortgage rates.
The Stowe and Waterbury markets saw an increase in inventory in Q4 2022 compared to Q4 2021, by 12% in Stowe and 16% in Waterbury. Lamoille North had a decrease in inventory by 11% compared to a year ago. As our local markets cool we expect to see the number of available properties increase. This is typical of this time of year. Since 2020 there has been a shortage of inventory, partnered with massive buyer demand, this is expected to ebb as we progress into 2023. As rates go up and national markets slow, it will start to offer more housing options to those who have been waiting to make a transition from one location to another or those looking for a vacation property.
What is most paramount in a transitioning market, and one that appears to be slowing, is having the right real estate professional and firm to guide you. At Coldwell Banker Carlson Real Estate we offer unparalleled service from start to finish. For sellers that means full and complete professional listing packages and guidance through the selling process. For buyers, it means market expertise, high-quality representation, and topnotch negotiation skills. Our goal is your goal, the most successful outcome.
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