Market Update: Is There Good News on the Horizon?
I hope you had a wonderful holiday season and a very happy New Year. The common theme for the majority of 2022 has been rising interest rates and their effect on the housing market. As rising interest rates continue, fewer folks can afford housing, therefore diminishing buyer demand and creating more competition among sellers. Buyers aren't purchasing homes nearly as quickly, so there's much more inventory to choose from, and that leads to values starting to slip.
When we look at December 2022, it's no different, month on month. We saw an actual drop in active inventory between November and December of about 24%, but most of that is seasonal as things slow down during the holiday season. More interestingly year on year, we saw a 222% increase in the number of active homes at the end of the month. Now when we look at closed homes, it's similar. We saw a drop in November, and December of 11% and a drop of over 43% year on year, showing that inventory is going up and the number of sales is actually decreasing.
"Buyers aren't purchasing homes nearly as quickly."
So jumping to a couple of quick market insights, it’s interesting that if we look at January 2020, all the way through the peak of May 2022, the Denver metro area saw an increase in value of 44.6%. Then finally, the Fed is planning on increasing the federal funds rate in January by a quarter point.
So we're not out of the woods yet, but there are some good things happening around the consumer pricing index and some of the things that affect inflation. Of course, we will keep you posted, and just let us know if there's anything we can do to help. Call or email us, and we’ll be happy to help you with all of your real estate needs.