Increased Rates & Restricted Inventory
Rates have inched up past 4.0% and new mortgage applications have plunged. For our local market, which has seen a steady decrease in inventory, year after year, for more than a decade - the impact should be to a mildly cooling appreciation rate.
Partial data for February shows 67% of houses and 53% of townhomes and condos were sold for more than list price. The median premium paid was 7.7% for houses and 6.7% for attached dwellings, respectively. Contrast that to January, when nearly 80% of houses sold received a premium.
Is this a sign of a cooling market? Yes, but we're really talking white hot to red hot. If you're sitting on the bench, hoping for a wholesale correction, I would advise you to expect to be sitting for years. A deep correction in an inflationary environment is along shot. In the last few years, it was more typical to see 20% to 30% of new listings get a small premium to the list price. We're still over double that, at least for houses.
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Osman Parvez is the Founder and Employing Broker of House Einstein. Originally from the Finger Lakes region of New York, he lives in Boulder with his wife and their Labrador Retriever. He has been a Realtor since 2005.Osman is the primary author of the House Einstein blog with over 1,200 published articles about Boulder real estate. His work has also appeared in many other blogs about Boulder as well as mainstream newspapers, including the Wall Street Journal and Daily Camera. For more information, click HERE.
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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties. House Einstein strongly recommends conducting rigorous due diligence and obtaining professional advice before buying or selling real estate.
