Friday Update December 2, 2022
Hey I've got friends in town and we're installing a wood burning stove today! Power outages and natural disasters be damned, we will have heat and a surface to cook on. Also that means a short rant from me this time.
Today in our local market we have 1,469 single family existing homes available to buy. This is staying relatively flat over the last few weeks as we go through the holiday season. I went out yesterday and showed six houses on the north end of the Springs and the days on market as well as the number of price reductions is like night and day versus what we got used to last year. Total 180.
I've had the pleasure of seeing many homes purchased by the very I Buyers that were supposed to change the real estate industry forever. On average they are 70-100k underwater on their purchases and haven't even gone under contract yet. Revolutionary business model for sure! Keep it up until you can't. LOLZ
November ended so lets look at month end stats. November of 2021 we had 1,491 total sales at a median price of $450,000. Median days on market was 5 and houses as a rule were selling over list price.
Fast forward one year to the November that just ended. We have just 830 total units closed out with median days on market now at 24. Median sold price is still $450,000 but houses are now selling for roughly 96% of original list price. One thing that's difficult to pull without coding skills is the average seller concessions in this market. I can tell you from personal experience that last year seller concessions were pretty close to 0 and this year it's not uncommon to see seller concessions look like this $xx,xxx.
Much slower market that gives buyers not only time to sleep on homes but also gives buyers selection and leverage.
Interest rates have pulled back significantly from a month ago. The midterms are over and that uncertainty has been removed from the market. We have manufacturing numbers coming in at absolutely dismal level. The Chicago PMI came in at like 37.2 this week which suggests a rapid contraction of economic activity. The leading economic index is showing serious issues.
The yield curve is inverted at levels we haven't seen since the dot com bust on the 10 year and 3 month and the 10 year and 2 year is inverted at levels unseen since 1981. These are massive red flags as far as economic indicators are concerned. The Fed sees this and is softening their tone quite a bit in regards to hiking the Fed Funds rate further.
In a super nutshell there is quite a bit of fear in the market. Interest rates have improved significantly over the last few weeks but between the holidays and the declining consumer confidence the lower rates aren't really sparking a new wave of buyers to enter the market. This is good news for buyers that are willing to be patient and enjoy negotiating. There are deals to be had and in my opinion there will be more deals to be had in the coming months.
As far as selling right now is concerned it's still highly doable. It's just that instead of swinging for the fences in today's environment sellers have to meet the buyers where they're at. This may mean that you subtract 10-15% from comps posted in the first and second quarter of this year. However that still means that the vast majority of home owners, barring any additional borrowing, have equity in their homes.
Foreclosure wise it seems like activity is starting to pick up on the back end. But its picking up from basically 0 so its really hard to gauge where that train is going. So far this year in El Paso County, and this is through September as that is the latest data I can get, we have had 593 total foreclosures. This is obviously up significantly over 2020 and 2021 but those years don't count. 2019 we had 827 foreclosures, in 2018 it was 908 and every year prior to that going back to 1998 was higher. What I'm trying to say is that if there is a wave of foreclosures or evictions as the news had us believing it isn't here or it isn't here yet. Not saying it can't happen, just saying it's not happening now.
Post a Comment