CHICOPEE, Mass. (WWLP) – The American Housing Market to start 2023, in short, confused.

In the Pioneer Valley, sales are down and inventory is low, but prices remain high, all with interest rates continuing to rise. Prices are almost 12 percent higher than in December of 2021, while closed sales dropped by almost 37 percent.

These recent trends, as Realtor Carrie McCorkindale describes, are keeping both buyers and sellers on the sidelines.

“Six months ago, you would have 30 people coming through. Now, you’re lucky if you get four or five. So it’s really starting to change and everybody is waiting to see what’s gonna happen,” Carrie of 1 Worcester Homes explained.

The Federal Reserve has been hiking interest rates to cool inflation, and experts have said for months that once sales slow down and the market cools off, a drop in prices is sure to follow. However, we are currently paying a median price of $313,000 for a single-family home in the Valley. Nationwide, prices have increased for 130 consecutive months. That’s the longest streak since the National Association of Realtors has ever recorded, with data all the way back to 1968.

Specifically here in the Pioneer Valley, closing prices in December of 2022 were 2% higher than the year before and sales were down 36%.

And to add to the squeeze? Continued drops in inventory.

The key, experts say, is that low inventory. Here in the valley, there were 19 percent fewer homes for sale in December of 2022, than in 2021. As long as supply remains low, demand will be high, and people will continue to pay over the asking price.

So what does that all add up to? Are you better off as a buyer or seller?

Carrie says neither and you’re in an even worse spot if you’re shopping for a first home.

“It’s not a seller’s market anymore because they can’t pick their price because buyers don’t have as much money to spend now with the way the market changed,” she told 22News. “I think a lot has to do with the Fed and the interest rates because that determines what buyers can spend and if they can.”

Still, almost third of home sales across the country last month went above asking price. That fact alone is forcing many first-timers off the market. Historically, about 40% of home sales are first homes. In December that number was just 26%.