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
Bears or the Bulls?? Who Wins in 2024?
Dated: December 16 2023
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“Home prices remain stubborn despite decade low sales. In the Pikes Peak region, we are sitting at 2012/2013 levels of units sold and yet finish November with a 2.5% increase in median sales price. This continues to be frustrating for the buyer waiting for an affordability pivot. That elusive pivot that just has not hit, yet. But will it? Looking at today’s numbers you see a 25% drop in sold homes year-over-year and 5.2% less active homes to choose from. What gives and what may unfold as we go into 2024?
“The real meat and potatoes is what is happening now and how that may influence the economy moving forward. November added more data that helps us try to predict that path. Knowing that housing is a lagging indicator, we would then want to look at those leading indicators to see if we can figure out the direction for housing and if the Federal Reserve pivots on rates, what that means for the economy. Manheim’s price index has shown a drawdown on the used car market of 18%, the largest in history. Lumber prices have fallen back to pre-COVID levels. New home sales dropped 12.3% as of October, the largest decline since 2009, and by November, Reuters reported a 17.3% drop. We’re also seeing new home builders cut pricing or offer incentives not seen since going into the last recession. The JOLT report (Job Openings and Labor Turnover) showed job openings declining, and I am guessing the fourth quarter will reveak an uptick in unemployment. Corporate bankruptcies continue to rise, consumer spending continues to drop, and savings accounts are almost depleted. Retirement account withdrawals are alarming and hedge funds are now selling homes across the country.
“I continue to be bearish on housing and believe the state of the economy is worse than most people think. I believe unemployment will go up next year, inventory in housing will increase as would-be sellers realize home prices have room to fall and list their homes trying to lock up equity. Which brings me back to the point of a Fed pivot on rates – a tell-tale sign that the economy is hurting and bad things typically happen after the pivot despite many in the industry claiming that it will bring the buyers back and house prices will continue up. If the past rhymes with the future and the Fed has six rate drops next year as traders are betting, then I am betting it’s because they see a dumpster fire beginning and are trying to get ahead of that before it gets out of control. The U.S. economy will be the last to correct, but will follow Germany, Japan, and China which are all showing severe economic issues already,” 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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