Prices hit their peak in May 2022, shortly after mortgage rates hit 5% and before they peaked over 6% in June. Once that happened, buyer demand dropped dramatically and the reflection in prices started to show a trend downward. Now mortgage rates are near 7% and sale price per square foot is down 9.6% over the course of 4 months, currently measuring less than 1% higher than January 2022 and representing the elimination of appreciation achieved from January through May.
66% of active sellers in the MLS (new homes excluded) have owned their home for 2 years or longer. This means that even with the most recent downturn in price, the 2-year appreciation rate from September 2020 to September 2022 is still 40.3% based on per square foot measures, and the median sale price is $112,000 higher, indicating most sellers have enough equity to shoulder the added costs to sell in this marketplace.
Looking Forward:
We’d like to believe the market will do what it did following the 2012 recovery period. And that is, get back to the sustainable 4 to 5% average long term appreciation (seen both locally and nationally) and not the 2007-08 crash in the market that essentially wiped out the staggering 45% gains of 2004-05.
