COLORADO SPRINGS“The statistics do not tell the entire story. We may show only a 1.1% drop in the median sales price for all properties, and a slight uptick in active properties, but the real
A Cold Winter or A Surpise In Housing?
Dated: October 14 2023
Views: 415
“As we look at September housing data, you begin to see a real anomaly. Active homes across all properties dropped just shy of 12 % year over year. We also had a 26.8% drop in total sales year-over-year. But then out of nowhere, you have a 4.5% jump in median sales price. Why? We have dropped so low on units sold that only the upper-end properties are being counted. We are struggling to sell entry-level and mid-level homes in many areas. And as those upper-end homes sell, they are pulling up values on our statistics. We are grading on a bell curve and that number is now skewed. We are struggling in these lower price points because middle America continues to feel the pain of higher for longer. A term we are all getting annoyed with. So, let’s see how that is affecting other areas of our economy.
“The 30-year mortgage continued its trek north. The pressure on lending and housing is real. Home values holding does not just wish away that we are losing a massive amount of home sales year over year. And we are off 2021 numbers by almost 50% for units sold. The current mortgage is the highest it has been in two decades. Mortgage applications continued to crater through September. With housing accounting for 20% of GDP for the economy, these are real numbers that really affect a lot of people in a lot of industries. That does not bode well for the economy in the long term.
“So why is there no recession yet? I believe the odds of a 2024 recession are increasing and many people are starting to take note. Typically, recessions follow a drop in M2 money supply by two years. M2 began its decline in 2022. That math then works out. The Motley Fool dropped an article recently titled, ‘For the First Time Since the Great Depressions, US Money Supply Is Shrinking. History suggests this spells trouble for stocks.’ Market Insider had an article titled, ‘The U.S. housing market is headed for the largest sales slowdown since 2011, Fannie Mae says.’ That article quoted a report from Fannie Mae stating that a mild recession is likely in the first half of 2024. I believe that we have plenty of other signs showing the economy is seeing a shift. How hard that shift hits will be based on the future employment situation. If the Federal Reserve can keep a balance to employment, then we may have a miracle soft landing. The flip side is, if they cannot, it will be the most epic bubble pop we have ever seen and it will be seen across many sectors, including housing,” said Colorado Springs-area REALTOR® Patrick Muldoon.
Patrick Muldoon
I have many interests and hobbies to supplement my busy career in real estate. Although I enjoy my work I also enjoy finding free time to enjoy the most important things in life. This includes being w....
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