Hurricane Ian was a pretty big scare for us. At one point, it looked like it was gonna hit our Airbnb directly. I was checking the cameras and saw rain and the wind blowing all the trees and stuff, but nothing too concerning, and we are SO grateful.
We had guests there, and that was shocking because we assumed they’d have canceled. But it felt good to know it wasn’t there alone. My good friend still hasn’t heard from her mom, who did take the blunt force of the storm. We’re all just hoping she’s okay. And everyone’s okay. Although, obviously, everyone isn’t.
If you want to donate to help those affected, donate here.
For our part, we’re lowering the prices for renting our house, so we don’t profit and allowing people to bring their pets. Maybe that will help, if only a little; giving a safe place to stay to some who have been devastated by Ian. I don’t know. It’s all devastating.
On another less sad note, Sterling had to have FIVE of his NINE cavities filled the other day. It was like watching a horror movie. I kid you not. Unpleasant. Kids, take care of your teeth!
And Bridger has a dance coming up next week (that’s in the middle of the day- WHAT?), and he’s asking the girl he’s liked since last year. Please say yes please say yes please say yes please say yes…
My Real Estate Status
I have a new first-time homebuyer under contract. He found me on Google, called me, we spoke, I sent him some recommendations, he hired me. It’s been great and a real highlight during all the hurricane stuff.
He’s a cool, younger guy, and he really knows what he wants. We saw a doozy of a cabin (not doozy in a good way) before we came across the place he fell in love with. He walked in and knew immediately that this was the home for him. That’s a dream for an agent. Well, THIS agent, anyway.
It had some offers already, so there was some edge-of-your-seat stuff going on, but it worked out. We’re all thrilled. The transaction is really special. He’s so happy and enthusiastic. It is a rewarding experience.
As for my Littleton listing, we withdrew. The sellers decided to rent it instead, and we’ll circle back to it in a year or so. They have it rented now, and it’s for more than their mortgage, and, really, what more could you ask for?
We have a showing this Saturday on my W. Ranch listing for a couple who have a home in LA and in NYC. They’re looking for a great, private place between both. I think this listing will be ideal for them. Fingers crossed. Also, LA? NYC? I’m getting serious famous-person vibes. You? What if it’s, like, the Beckhams? I’m getting chills…
The Housing Market Is at an Inflection Point
Current Denver Area Real Estate Market
"The Odds of Selling is where I take into account the total number of homes available in the market vs. those that go under contract and or close in the same week and project it forward for a 30 day period of time. The Odds of Selling this week dropped to 49.9% for all price ranges, matching the Odds of Selling that we saw when we went into quarantine in 2020. The Odds of Selling is typically 53.4% for the month of September based on data from 2013-2021 on average. The Odds of Selling typically stabilizes if not slightly trends upwards as we head into Q4.
Price reductions continue to be prevalent in our market. Based on data from last week 47.7% of all units that went under contract made price reductions, with the average price reduction -6.5% or nearly $47,000 off of the original list price. Typically in the month of September we 31.4% of homes reduce their price based on data from 2013-2021 with an average price reduction of 5.1%. Price reductions are not only more prevalent but larger than experienced in this real estate cycle leading us to believe this is a deeper correction than just the seasonal norm."
FED RAISES INTEREST RATES FOR 5TH TIME AND 30-YEAR FIXED-RATE MORTGAGE RATES BRIEFLY JUMP OVER 7%
So what is the deal with mortgage rates?????
1. Last Thursday, the FED raised the federal funds rate by .75. While this alone doesn't typically move MORTGAGE interest rates, they signaled further hikes down the road. The market had anticipated and "priced in" the hike, but they weren't expecting the overly "Hawkish" press conference. Instead, Jerome Powell(FED Chair) essentially told the markets they would raise rates or do whatever was necessary until inflation reached their target rate of 2%. Naturally, the markets did not like this and immediately sold off bonds, causing mortgage rates to increase.
2. On Monday, the European Central Bank(ECB) said they were following suit and raising interest rates to combat their inflation. Two of the largest and most influential economies are battling record-high inflation and high rates, essentially getting no confidence from their central banking institutions... We again saw a record selloff before the market was even live in the US and, by the end of the day, had hit a 22-year high on mortgage rates.
The market doesn't like unexpected news or direction and reacts as such. Fortunately, today the markets received some good news from Europe that they may back off their previous aggressive stance. As a result, we gained back some losses in the stock market, the 10-Year Treasury bond backed off from its high of 4%, and most mortgage lenders were pricing mortgages in the mid to upper 6s for top-tier borrowers.
How will we know when the volatility will stop? When will rates come down again? We've talked about this before, but Mortgage rates are primarily driven by inflation, which we all know is abnormally high. When the Fed hikes the Fed Funds Rate, they try to slow the economy and curb inflation. If the Fed is successful in cooling inflation, mortgage rates should decline. History proves this during rate hike cycles over the past 50 years. However, if the market doesn't believe the FED can get control of inflation, we will continue to see volatility in mortgage rates. For a reminder, what tracks inflation…Consumer Price Index (CPI) The next one comes out on 10/13 and the market expects inflation numbers to go down.
If you're a buyer in today's market, I suggest taking advantage of the 2/1 buydown. It allows you to have a rate of 2% lower the first year of the loan and 1% lower in the 2nd year. It’s the best way to take advantage of where rates sit today.
What Experts Say Will Happen with Home Prices Next Year
Experts are starting to make their 2023 home price forecasts. As they do, most agree homes will continue to gain value, but at a slower pace. Over the past couple of years, home prices have risen at an unsustainable rate, leaving many to wonder how long it would last. If you’re asking yourself: what’s ahead for the price of my home? Experts are now answering this question, and it's welcome news for homeowners who may have been led by the media to believe their home would lose value.
Historically, home prices have appreciated at a rate near 4%. For 2023, the average of six major forecasters (see graph below) is 2.5%. While one, Zelman & Associates, is calling for depreciation, the other five are calling for appreciation. The chart outlines each expert forecast to show where they project home prices are going in the coming year.
To understand why experts are calling for appreciation next year, look to the economics of supply and demand. Dave Ramsey, Financial Expert, says this:
“The root issue of what drives house prices almost always is supply and demand . . .”
Two things are driving home prices upward. First, the undersupply of homes on the market is an issue we continue to face in this country. We still don’t have enough homes on the market for the number of people that want to buy them. To further that point, we’re still in a sellers’ market nationally, and in that scenario, home prices tend to appreciate.
Second, millennials are moving through their peak homebuying years. Since they’re the largest demographic behind the baby boomers, demand isn’t going away any time soon.
Bottom Line
Experts are calling for home prices to appreciate next year, although at a slower pace than the previous three years. The reason for this is simple: the dynamics of supply and demand are playing out in real estate and will continue for many years to come.
Upcoming Events
- The Turntable Revue Concert- This brother-sister combo plays some serious music (of all kinds); grab your dancin’ shoes.
- 11th Annual HOOTenanny Owl & Music Festival- Learn about all things owls while you listen to some folk music, see some real live owls, and let the kids create owl art.
- Pugs in the Park- Time to get yourself your pug, am I right? If the heavy breathing doesn’t pull you in, the wrinkly face will.
- Manchester Orchestra- To all my indie music fans, Manchester Orchestra is coming, and these tickets are going fast.
- The Arc Adventures in Fun: Corn Maze at Chatfield Farms- What time is it? It’s corn-maze time; grab your pumpkin-flavored drink and the kids, and get to maize’ing (see what I did there?).
- Anthony Russo Band | Snowpack Taproom- Looking for some great rock ‘n roll to bring in October? You just found it.
