Perspective on 2023
This year marks my 42nd in Breckenridge and 30th anniversary in the real estate business. In that time I have seen three major downturns in the market. Late 80’s was the savings and loan and shale oil crash, late 90’s was the .com and 9-11 and late 2000’s was the Great Recession.
Many are saying 2023 will be the 4th downturn in my lifetime, I don’t see it. In February this year mortgage rates started to climb and the bottom was supposed to drop out. Yet year to date through November ‘22 there have been a total of 1,673 transactions and $2,095,150,887 in monetary volume. That’s $300,000,000 more than YTD 2019, a year that broke all records in the business at the time. Additionally average sales prices are up. YTD Year 2022 vs Full Year 2021: Average Indicators for $: Single Family +21, Multi- Family +20%. Median Indicators for Single Family +28%, Multi- Family +15%. Where are the signs of a crash? Don’t see it, I am optimistic about 2023.
Information courtesy of Land Title Company-See the full report
COVID had some strange effects on the world. Many of us didn’t know how to handle being locked up for months, then when the gates were opened they were flood gates. Everything was overwhelmed with demand. There weren’t enough cars, airline tickets or homes for sale. Every home, no matter the condition, was an auction. Prices jumped 35% in a year and all the buyer protection contingencies were waived. Sellers were in heaven unless they wanted to buy a replacement only they found out it was just as big a nightmare for them as it was for their buyers. The way it looks to me as I reflect on 2022, what some predicted would be the second worst year in real estate history, is that we are just coming back to normal.
On the normal list;
- First~ the 6% interest rate was the norm for over 35 years. Rates only dropped below that during the great recession of 2008. 16% unemployment and the market flooded with foreclosures was not a pretty site. I don’t think we want to go back there just to save a few percent on a loan.
- Second~ properties are staying on the market for a while so buyers actually have some choices instead of buying sight unseen.
- Third~ sellers are negotiable again when it comes to appraisals and inspections. All this makes for a balanced market and a win-win for everyone we hope.
Prices will probably hold steady or slightly ease. A crash is not likely as inventory will stay low and people who bought here are well qualified and have low interest loans or paid cash. The economy is still strong and their income is probably safe. Far different than 2008.
As a buyer you have a great opportunity to choose the place you like and be able to get in without paying over list and waiving your protections. It’s a good time to buy as prices not going up 30%, more than makes up for the interest rate rise. Especially since you can refinance when interest rates ease but you can never get over paying too much.