SUMMIT COLORADO SECOND QUARTER 2022 MARKET REPORT Report Written By: Elliot F. Eisenberg, Ph.D. Source: Matrix Multiple Listing Service SU MM IT CO LO RA DO
Collectively, this is a lot to overcome, and the forecast for GDP growth for CY2022 is, at best, 1%, with the probability of a recession sometime in 2023 at 75%. The good news - the economy entered this troubling situation in a much stronger condition than usual. Corporate balance sheets are strong, household finances are objectively good, and banking institutions are solid. If we do wind up in a recession, this is in no way a repeat of the Great Recession of 2008/2009. Current expectations are that inflation will top out no later than 22Q3, pulled back by both the Federal Reserve Board’s interest rate hikes, some organic improvements to supply chains, and slowing consumer demand, especially for goods.
That said, the projected decline in inflation is unlikely to be fast enough to change the Fed’s rateraising trajectory and certainly not after the recent strong jobs data. Moreover, inflation has become increasingly economy wide and is no longer contained to autos, energy, and food.
As a result, the Fed has made it quite clear that they will continue to raise rates due to worsening inflationary pressures even if it pushes the economy into a recession. They have signaled intentions to raise the fed funds rate every six weeks for the near future (perhaps for as long as a year) with the next several hikes in the 0.5%-0.75% range and then 0.25% until the inflation target rate is in sight. If inflation data does not worsen, the Fed will not meaningfully alter the current course, and 10-year Treasury and 30-year mortgage rates should not meaningfully change from where they are now. Of course, if inflation gets significantly worse, the Fed will tighten monetary policy further. Conversely, should inflation dissipate more quickly or if the economy stalls or falls into a recession, the Fed might institute fewer or smaller rate hikes, or stop rate hikes earlier than they would otherwise. Regardless, expectations of inflation went up rapidly in the first half of 2022, and rates are more likely, if anything, to fall from where they are now than rise.
“The projected decline in inflation is unlikely to be fast enough to change the Fed’s rate-raising trajectory and certainly not after the recent strong jobs data. ”
ECONOMIC OVERVIEW
Nationally
By: Elliot F. Eisenberg, Ph.D. This has been a painful half-year for the U.S. economy, with 22Q1 GDP declining at an annualized rate of 1.6%. At this point, the best-case scenario for 22Q2 is for very slight growth, around 1% or so, but it is more likely to come in flat or slightly negative as the economy continues to be battered on multiple fronts. While the impacts of Covid-19 had been declining, they may be re-emerging, both in the US and globally, and supply chain issues, while improving, remain very troubling. Inflation is extremely high and is impacting household incomes. In fact, national real income has been declining since the fall of last year. Household savings, which had been near record highs, have declined, especially in lower-income households, and consumers are spending less. Fuel prices remain near record highs, negatively impacting both households and businesses, and the stock market posted the worst half-year since 1970, with both stocks and bonds performing poorly. Monthly employment growth remains strong, although first-time jobless claims have noticeably risen.
Another meaningful change of late in the housing market is the rise in year-over-year inventories for the first time since early 2019. However, inventory growth, while high in percentage terms, in actual units remains relatively small. At the national level, available inventories are at 1.16 million units, still well below normal pre-pandemic levels. Price appreciation through the first half of the year was sur prisingly strong, much stronger than most economists had predicted. However, higher home prices and interest rates will manifest in slowing rates of home price appreciation, which is likely to shift from 15-20% over the past year to closer to 5-7% by the end of the year. If inflation is considered, real price appreciation may be around zero. In terms of new housing supply, new construction of multifamily properties will continue to do well but perhaps soften slightly because of tightening credit conditions.
Further, even if individual buyers get priced out, Wall Street is still buying homes for rentals, which puts a floor under price appreciation. ”
Demand for housing is still high, and demographics remain favorable. Further, even if individual buy ers get priced out, Wall Street is still buying homes for rentals, which puts a floor under price appre ciation. Thus, even if there is a recession, there will be fewer impacts on the housing market because we have never been this undersupplied going into a recession, nor have so many homeowners had so much home equity. The bottom line, this housing market is still a seller’s market, but less so than it has been for the past few years.
There are several key factors to watch in the housing market for the rest of 2022. First, while mort gage interest rates are unlikely to rise significantly higher than they are now, we are already starting to see the impacts of rising rates on the housing market. May closed sales, based on contracts from March and April when rates had increased somewhat, already show signs of slowing, and with high er mortgage rates since, sales activity is likely to show additional declines. In addition to interest rate impacts, softening in the job market, reduced household savings, and falling equity prices will slow sales. We already see this in data for weekly applications for first-time mortgages, which continue to decline on a relative basis compared to pre-pandemic levels.
Single-family starts are likely to decline somewhat from where they are now, but not by much. The number of single-family units under construction is relatively high, but that is less because of new starts and more because builders have been unable to complete homes under construction due to supply chain issues.
“Demand for housing is still high, and demographics remain favorable.
HOUSING MARKET OVERVIEW
Nationally
Median Sold Price 34% $2,062,500$1,544,250 2021 vs 2022 Avg Sold Price per SF 24% $754$609 2021 vs 2022 Average Sold Price 19% $2,442,781$2,044,421 2021 vs 2022 Avg Days on Market 52% 2144 2021 vs 2022 Total Dollar Volume 18% $234,506,949$286,219,004 2021 vs 2022 Number of Properties Sold 32% 96141 2021 vs 2022 Single Family Homes SalePriceLowest27% $565,987 SalePriceHighest 28% $12,200,000 BRECKENRIDGE 27 Boulder Circle, Breckenridge 6 BEDROOMS | 7.5 BATHROOMS | 5,260 SF
325 Four O’clock Road Unit #D-304, Breckenridge 2 BEDROOMS | 2 BATHROOMS | 1,094 SF Median Sold Price 25% $965,000$770,000 2021 vs 2022 Avg Sold Price per SF 30% $1,055$809 2021 vs 2022 Average Sold Price 27% $1,202,253$944,254 2021 vs 2022 Avg Days on Market 50% 1836 2021 vs 2022 Total Dollar Volume 31% $128,641,027$186,018,136 2021 vs 2022 Number of Properties Sold 46% 107197 2021 vs 2022 SalePriceHighest 21% $4,400,000SalePriceLowest32% $315,000 Condo/Townhomes
KEYSTONE Median Sold Price 38% $2,507,500$1,820,000 2021 vs 2022 Avg Sold Price per SF 23% $667$541 2021 vs 2022 Average Sold Price 33% $2,575,912$1,939,615 2021 vs 2022 Avg Days on Market 23% 2735 2021 vs 2022 Total Dollar Volume 2% $25,759,120$25,215,000 2021 vs 2022 Number of Properties Sold 29% 1014 2021 vs 2022 Single Family Homes SalePriceLowest24% $550,000 SalePriceHighest 9% $4,375,000
Median Sold Price 32% $802,500$607,000 2021 vs 2022 Avg Sold Price per SF 31% $821$627 2021 vs 2022 Average Sold Price 41% $905,213$641,064 2021 vs 2022 Avg Days on Market 81% 1053 2021 vs 2022 Total Dollar Volume 5% $105,004,654$100,005,929 2021 vs 2022 Number of Properties Sold 26% 116157 2021 vs 2022 Condo/Townhomes SalePriceHighest 18% $2,300,000SalePriceLowest8% $270,400 22714 US Highway 6 Unit #5940, Keystone 2 BEDROOMS | 2 BATHROOMS | 838 SF
COPPER MOUNTAIN Median Sold Price 3% $3,750,000$3,850,000 2021 vs 2022 Avg Sold Price per SF 27% $766$605 2021 vs 2022 Average Sold Price 3% $3,982,769$3,850,000 2021 vs 2022 Avg Days on Market 225% 134 2021 vs 2022 Total Dollar Volume 314% $15,931,074$3,850,000 2021 vs 2022 Number of Properties Sold 300% 41 2021 vs 2022 Single Family Homes SalePriceLowest22% $3,000,000 SalePriceHighest 41% $5,431,074
Median Sold Price 5% $725,000$692,500 2021 vs 2022 Avg Sold Price per SF 23% $871$708 2021 vs 2022 Average Sold Price 3% $768,625$743,367 2021 vs 2022 Avg Days on Market 14% 1614 2021 vs 2022 Total Dollar Volume 35% $26,901,862$41,628,542 2021 vs 2022 Number of Properties Sold 38% 3556 2021 vs 2022 Condo/Townhomes SalePriceLowest8% $300,000 SalePriceHighest 26% $1,550,000
SILVERTHORNE/DILLON Median Sold Price 36% $1,830,000$1,344,840 2021 vs 2022 Avg Sold Price per SF 20% $609$506 2021 vs 2022 Average Sold Price 39% $1,992,842$1,432,529 2021 vs 2022 Avg Days on Market 43% 3323 2021 vs 2022 Total Dollar Volume 4% $141,491,810$147,550,486 2021 vs 2022 Number of Properties Sold 31% 71103 2021 vs 2022 Single Family Homes SalePriceLowest22% $485,000 SalePriceHighest 71% $6,500,000 649 Fly Line Drive Silverthorne 3 BEDROOMS | 3 BATHROOMS | 1,876 SF
Median Sold Price 17% $688,250$590,000 2021 vs 2022 Avg Sold Price per SF 37% $686$502 2021 vs 2022 Average Sold Price 25% $788,010$631,868 2021 vs 2022 Avg Days on Market 52% 1225 2021 vs 2022 Total Dollar Volume 22% $107,169,412$137,115,421 2021 vs 2022 Number of Properties Sold 37% 136217 2021 vs 2022 Condo/Townhomes SalePriceLowest20% $211,277 SalePriceHighest 80% $2,389,000
FRISCO Median Sold Price 26% $2,100,000$1,662,500 2021 vs 2022 Avg Sold Price per SF 26% $782$621 2021 vs 2022 Average Sold Price 20% $2,241,591$1,862,786 2021 vs 2022 Avg Days on Market 10% 1110 2021 vs 2022 Total Dollar Volume 5% $24,657,500$26,079,000 2021 vs 2022 Number of Properties Sold 21% 1114 2021 vs 2022 Single Family Homes SalePriceLowest21% $1,350,000 SalePriceHighest 2% $3,250,000
Median Sold Price 30% $1,000,000$767,050 2021 vs 2022 Avg Sold Price per SF 33% $834$627 2021 vs 2022 Average Sold Price 34% $1,109,992$828,259 2021 vs 2022 Avg Days on Market 43% 47 2021 vs 2022 Total Dollar Volume 3% $54,389,614$53,008,549 2021 vs 2022 Number of Properties Sold 23% 4964 2021 vs 2022 Condo/Townhomes SalePriceLowest57% $410,000 SalePriceHighest 15% $2,192,850
PARK COUNTY Median Sold Price 23% $620,000$503,100 2021 vs 2022 Avg Sold Price per SF 24% $384$311 2021 vs 2022 Average Sold Price 26% $660,320$525,279 2021 vs 2022 Avg Days on Market 0% 4040 2021 vs 2022 Total Dollar Volume 14% $66,692,350$58,305,923 2021 vs 2022 Number of Properties Sold 9% 101111 2021 vs 2022 Single Family Homes SalePriceLowest90% $275,000 SalePriceHighest 108% $2,150,000 71 Sheep Ridge Road, Fairplay 3 BEDROOMS | 3 BATHROOMS | 2,076 SF
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