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A New Drum Beat In The Real Estate Market 

Home > Blog > Economy > A New Drum Beat In The Real Estate Market 
Posted on May 1, 2023 by Laura Lucky

A New Drum Beat In The Real Estate Market 

Take a look at the monthly average sales price per square foot in the following daily chart. The latest average is over $279, meaning the highest pricing during the last 6 months was recorded on April 10th.

Although the dip between November and January was a bit scary, the recovery in price has been equally strong since then.

Volume is well below normal, with both sellers and buyers lacking enthusiasm, but prices are buoyant and in even better shape than we expected. With the Cromford® Market Index still moving higher, our expectation is that prices will continue to edge higher in the next few months. I would not have strong expectations for the third quarter because we almost always see a 3Q dip in every year. This is due to the seasonal effect on the luxury market. Unless we get an unexpected source of new supply, the fourth quarter should show a rebound from that dip, meaning that annual appreciation will have turned positive again by November. To that end, I have a new drum beat – sourced from what our best short and long term indicators are telling us:

SHORT TERM: Look for continued improvement this year, barring systemic external forces. (interest rate hikes, currently in the 6-ish range, well below the 50-year average)

LONG TERM: Our bank grade 5-year forecast ‘sees’ a flattening of prices in the Valley over the next 5-years’…and here comes the punchline:

‘May that 5-year forecast hold – as it sustains the massive equity / appreciation that has been accrued in recent years.’

FOR SELLERS: Seller gains will not only be sustained, but may see some additional gains in the short term.

FOR BUYERS: It suggests that while buyers may have missed that massive appreciation, their purchase of a home as an asset makes sense, as it always has from that ‘asset’ perspective.



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