09/03/2022
DM me for a chat on these data points from August in this month’s DMAR Market Trends Report and what it means for you. They confirm our slowing housing market. Active listings, while almost double last year, have started their seasonal downward slope towards December by dropping 5.7% month-over-month. New Listings peaked a few months early this year and dropped another 18.5% this month. Median and Average home prices have also seen a steady slowdown from well over 20% earlier this year to a 6.8% average and 8.5% median year-over-year increase in August. Days in the MLS grew from 6 median days to 11 and Close-to-List dropped to 99.41%. There is no denying it’s a slowing housing market. Is it recessionary?
Year-to-date new listings and home sales are behind 2018 and 2019 by approximately 8%, showing that both sellers and buyers are moving slower, not because of the pandemic frenzy, but also pre-pandemic seasonality. The slowing has come primarily from the rapid rise in mortgage interest rates, increasing the monthly cost to purchase. August saw more than its share of volatility. We started the month celebrating 4.99% only to see Jackson Hole’s meeting rattle the markets, pushing the 10-year treasury yield up to 3.25% and the 30-year mortgage rate to 5.99%.
This slowdown, while not over, will probably not be long-term.
Here in the Denver real estate market, there was 6,939 homes for sale on August 31st, double 2021, 25% more than 2020 and still 25% less than 2019. Inventory is still historically low for the cyclical demand Denver sees, evidenced by 1.6 months of inventory. Nationally, inventory has not even recovered to 2020 levels yet. This low inventory will wane as the year finishes, entering 2023 with another opportunity for bidding wars and pricing pressure. For that to happen, however, we will need to see interest rates settle and start to drop as the economy does slow into its recessionary period.
