Prices ebb and flow, correction or recession.
In today's webinar we recapped a little bit of Patty Silverstein's presentation last week as to whether or not we are in a recession or a correction. Patty measure approximately 10 different metrics on this topic and she stated that 7 out of 10 of her metrics pointed towards a correction and not a recession. We are seeing a pricing correction in the real estate market as well, beyond our normal seasonal retraction. Prices ebb and flow each year with the bulk of price appreciation happening from January - June and prices fall back as the relationship between supply and demand shifts from July-September. Typically we see prices fall back approximately 5% from Spring to late summer however this year prices have fallen back 9.9% from peak pricing back in April. This graph shows month over month price change as it is compared to the last 9 years in our real estate cycle. Even though prices have fallen back 9.9% from peak pricing the average home price is still up 8.4% from one year ago. We have room for correction.
Higher interest rates are affecting the price points between $500,000 to $1,000,000 price range the most where in this market we have 27.4% of the units required to offset demand to create a 6 month supply of inventory where we would flip to a buyer's market. However homes between $1,500,000-$2,000,000 are in the shortest amount of balance where we only have 16.7% of the inventory required to offset demand. The luxury price points are holding fast and are actually tighter than average priced homes in Metro Denver.