By Mike Bodeen · 24 December 2022
I offered to write today’s Market Snapshot since one didn’t get sent out this past Monday, and I’ve never done a Christmassy one that I recall. So, I wondered, what kind of an appropriate seasonal message about real estate could I come up with?
As a follower of Jesus, one of the things that I consider this time of year and the meaning of Christmas for me is “hope.”
A portion of the lyrics from O Holy Night read:
…The thrill of hope, the weary world rejoices,
For yonder breaks a new and glorious morn.
Well, to the rescue is ole Saint Cromford to bring us some hope amidst the bags of coal left on our doorsteps. And I think whether you’re a buyer or seller, there is presently and in the near future, hope that your best market will arrive.
Viewing the chart below, the Cromford Report suggests that our current place in the emotional market cycle is trending from the bottom, which is “Despair,” to “Skepticism.”
The coal is all the (accurate) reports about very our low transaction volume, as a result of the hyper price appreciation we had subsequent. And now, the meteoric rise of mortgage rates, effectively jolting buyers ability and/or desirability to buy at this time.
If you’ve been a follower of our Snapshot, you’re in the know about how higher prices and higher mortgage rates have contributed to the despair of the market for buyers and sellers alike.
The good news that Cromford reports is that while supply is dropping, demand is beginning to rise, even though many people will be slow to believe it – the “Skepticism” phase. Skepticism is the beginning upward emotional trend of this chart – and what follows the “Skepticism” phase? Hope!
The Cromford Market Index, which has been eking for months towards a buyer’s market, has now reversed course and these last few weeks has been rising again in favor of sellers, bringing more cities into or nearly into balance.
None of this suggests an immediate turnaround – but I can tell you from decades of market experience that human nature has a hard time thinking that our current reality will ever change – in this case, a buyer’s market. Let me assure you, they always change, both up and down.
Whereas we have been in a down market, mortgage rates have dropped, and many sellers are offering lucrative incentives to help buyers get into a home. For sellers, this is a hopeful sign that 2023 will turn positive as well.
Our Christmas wish for our friends and clients is that this season will bring a thrill of hope, inner peace, and lasting joy.
Merry Christmas!
Market data referenced in this article comes from The Cromford Report.