wynnlynchproperties

NOVEMBER MARKET UPDATE - It’s been a while since I’ve done a market update and to be honest there hasn’t been too much to report through the summer. Locally, inventory is still somewhat low and average days on market has crept up, but only to about 45 days. Prices have been appreciating through the year, but at a lower rate than years previous.

Interest rates have been rising throughout the year and are at a high for recent decades. Just days ago though, the Fed waived a chance to raise rates and mortgage rates have begun to drop a bit. With about a .25 point drop this week. It has yet to be seen if that will continue but likely rates will gradually drop though next year. Markets like Boulder that are stable now will likely see prices revert to steadily rising.

The last bit of news out of the last month has to do with a recent class action lawsuit. The base of the lawsuit is about companies encouraging agents to not give sellers a clear choice when it comes to paying an agent that brings a buyer. Custom in the US is to have the seller pay 5-6% commissions, which get split between the seller’s and buyer’s agents. Commissions are 100% negotiable and the seller can opt to not pay a buyer’s agent. This can affect how the listing is sold and who will take the job, but it is a right. Likely we will see more disclosures, but not too many major changes. This lawsuit has brought up other issues though and going forward some changes will be less mandatory fees for agents, and more restrictions on call/text/email outreach.

FEBRUARY MARKET UPDATE - February hasn't brought the answers many were hoping for. A recent inflation jump has changed the outlook for rates and the economy. Rates are again going up, but it's unclear if that will continue. In the local market, list to sale ratio is under 100%, meaning seller's think their homes are worth more than current buyers do. Supply is slowly increasing with lack of demand, but prices still seem to be near flat overall.

Since the story on a national level is still unclear, I'll share a market issue I've been noticing personally. I check new listing often to look for investment properties. In 2022 there were still deals to be found. It wasn't like 2020 or 2021 where people were getting a very cheap mortgage, seeing quick appreciation(equity), and seeing cash flow right off the bat, but it was still working. I would find a couple cash flowing rental properties a month. Ones that would be money makers after the property was repaired and rented. Good ones would go fast and cash offers would win out, tougher ones would sit. This year, rents have not risen like mortgages have. Finding an investment property that's financable and cash flows is very rare right now. Finding good properties usually involves finding properties that have not sold with owners who need to be out. I see three possibilities in the next year or so:
1. Inflation continues at or above it's current rate, mortgages stay at or above 6.5%, owners fight to raise rents to keep the properties values and we see a big spike in rent price, with flat property prices.
2. Inflation continues at or above it's current rate, mortgages stay at or above 6.5%, buyers fight for lower prices. Days on market would go up, followed by gradual drops in price from people who need to sell. Rents stay flat, prices go down.
3. Inflation drops, rates stop being risen, mortgage companies get competitive and a drop rates, bringing back an appreciating market.
What actually happens will depend on the economy as whole. If inflation continues and rates rise further, rents will be raised where they can be to maintain prices. Pay close attention to local politics to see what happens near you.

NOVEMBER MARKET UPDATE-The holiday season is upon us and it is definitely slower than last year. Interest rates are in limbo right now and many people are deciding to wait until the new year to move. Many just because of people’s schedules around the holidays, but some are hopeful that rates will come down in the next couple months. The Fed has said that they are seeing a slow in inflation and, although they still plan to raise rates, are now planning to do so in smaller increments. This has led to a rally in the stock market and new hopes of lower mortgage interest rates, which are not directly correlated to the Fed’s rate.

Only time will tell what happens to the market. Expect December to be slow as well in terms of home sales, but watch for news on rates. Lower rates coming into the new year, with people back to normal schedules, could lead to another home sale boom. We will just have to wait until January to see.

My last note for today on housing market news, is when you hear about markets decreasing, pay attention to which markets. A recent Redfin report shows that certain areas are making large gains, some are massively decreasing, and some are just staying stable. Boulder has been a relatively stable market, but places that were affected by the COVID moves are the ones that are moving now. Many areas in the southwest saw a rise in people fleeing cities, who are now moving back and lowering prices by selling. On the other hand, cities that saw people leave during COVID, especially in the midwest are making a comeback price-wise.