Mid-Year Real Estate Market Review - 2023

As usual, we are all on pins and needles waiting to see what the fed will do next with interest rates. But counterintuitively, it might not actually matter much.

Despite many pundits’ predictions of doom and gloom for the real estate market, a real fed-engineered downturn has yet to materialize. To the contrary, the market has remained incredibly resilient in the face of interest rates at 15-year highs. To quote Daryl Fairweather, Redfin’s Chief Economist, “the most surprising thing about this housing market is how the increase in interest rates has affected supply and demand pretty equally.”

While higher interest rates may keep some buyers out of the market, they have reduced supply as well, as sellers locked in at low interest rates are reluctant to sell. Similarly, while lower rates will bring some buyers back to the market, they will likely increase supply as sellers feel better about moving and builders ramp back up.

Here in the foothills, active and pending listings as well as closed sales are down year-over-year, but all up from last month, perhaps indicating a welcome return to normal seasonality. And, while prices may have declined slightly from their peak last summer (less than 5%), median sales price in the foothills area is up slightly from last month.

Long story short, the overall impact of rate increases has not been as large as some expected and the impact of future increases or decreases will likely be muted as well. The truth is that our local real estate market is still strong, just a little slower than the frantic pace of the previous two years. We are still up almost 10% from two years ago and almost 30% from our average sales price in 2020. Good homes are still in demand and there aren’t too many of them on the market. In our opinion, this is the return of a healthy real estate market.