Have Home Prices Reached Their Peak?

Have Home Prices Reached Their Peak?

May 2022 Newsletter

As the FED continues to drive inflation higher, the housing market is definitely starting to feel the effects. Mortgage rates on a 30-year fixed are now 5.375, up from around 3.1% in January. On the national level, home sales fell 2.7% between February and March, according to a recent article from Realtor.com. This is perhaps a direct result of buyers shying away from the rising interest rates. However, it’s worth mentioning that our Colorado market is somewhat of an outlier; in the Denver Metro we saw home sales rise by 36% in this same time frame.

 

As inflation is slowing home sales nationwide, the rate of home price appreciation is also expected to slow in some areas. But again, Colorado is a hot market compared to the national average. CoreLogic, a trusted source of property intelligence in the industry, recently put housing markets into five categories based on the likelihood that home prices will fall in the next 12 months. As you can see on the map, most of Colorado is in the very low category, or a 0-10% chance that home prices will drop in the next 12 months. Beside the

1st map

coastal cities, you can see many areas are blue. This is due to the mismatch between demand and available inventory, which may be elevated here in Colorado, no pun intended.

 

The market is still hot along the Front Range, but that doesn’t mean we won’t see these trends in the coming years. CoreLogic created another map that shows whether local income levels can support local home prices. Interestingly enough, almost all of the blue areas on the previous map are now red, meaning the market is overvalued overall. When you think about where inflation and mortgage rates are heading, as well as current home prices, it’s not hard to imagine that home price appreciation will slow down

2nd Map

in the next year or so. In a recent article from Housing Wire, the author cites that Fannie Mae expects home price growth (nationally) to be just 10.8% in 2022, and go down to 3.2% in 2023.

 

Homeownership can help shield you from inflation. By locking in what’s usually your biggest monthly expense, housing costs, you allow yourself more stability and security amongst uncertain market conditions. Also, appreciation is still in the double digits, so you can build a nice chunk of equity within the next few years. Give me a call today if you’re thinking about making a move!

 

Monthly Market Snapshots

Monthly Market Snapshots

1-Denver-v2
4Boulder-v2
3-NoCO-v2
2-Springs-v2

Glass Half Full: Denver’s Premier Philanthropic Food & Drink Event

Glass Half Full: Denver’s Premier

Philanthropic Food & Drink Event

2022-03-22_11-27-46

Glass Half Full is Denver’s premier philanthropic food and drink event - featuring cocktails, beer, wine from local purveyors, cuisine from top local restaurants, and not-to-be-missed silent and live auction items. This year’s event is a great opportunity to meet Greenhouse Scholars and other community members. 8z has worked closely with Greenhouse for years, sponsoring seven scholars thus far. For the first time, 8z Real Estate is a Valedictorian Sponsor for this year's event - taking place Friday, May 13th from 6pm - 9pm at McNichols Civic Center in Denver. Don't miss it!

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