Market Musings

Tom Brezsny
- Tom Brezsny

Market Musings

Heading towards the halfway mark of 2023… must be time to catch up on the meanderings of the market to see if there’s anything useful we can glean.  But first a quick show of hands….   Is anyone else surprised at how high home prices still are, despite all the rumors about the market’s imminent demise? 

Median price for single family homes in April at $1,350,000?! Median price for condos at an all-time high of $950,000 in April?! That wasn’t supposed to happen. Let’s look back at last year to try to gather a little more perspective. By May of 2022, we’d already experienced some surprising turns:  

First, we had a wild first quarter that saw the median price skyrocket from $1.25 million in January (right around the highs of 2021, the best year ever recorded in real estate!) to a whopping $1.60 million in March!  Almost overnight prices had morphed beyond recognition and the speed and intensity of the everyday marketplace ratcheted up beyond  the breaking point.

It wasn’t really true, but it  felt like every house that came on sold in the first week with its pick of the litter of all-cash, no contingency, ten day close offers – all competing to push the price up 30% above list.  

And even though we thought we were immune to the effects of any more surprises in this post-pandemic world, we still weren’t ready for a surge of such speed and magnitude. Just when we thought it couldn’t get any crazier, it got crazier in ways we never imagined.  It was all too much – except for the few sellers who cashed in beyond their wildest dreams and were fortunate enough to be moving somewhere that didn’t require them to turn right around and spend it all on the next place. 

And secondly… right at the peak of the frenzy, when offers and escrows were flying as fast as humanly possible, a perfect storm of bad economic news came out of nowhere to cast a pall over the proceedings. The list of threats grew daily: Russia’s invasion of Ukraine, fears about inflation, worries about recession, job lay-offs, stock market volatility and of course, the ultimate dagger aimed at the heart of real estate – a 2% increase in mortgage rates in a month!

At the time, It wasn’t much of a stretch to assume that …  the longest-running, highest appreciating, craziest-making market that Sellers had enjoyed, more or less unabated, for 10 years, had finally reached an inglorious end. That perfect storm was going to dry up demand and drive the affordability of an average home, way beyond the reach of average home buyers.  

More market musings next week…

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