02/14/2023 #CompressionCycle #TheBuyers’Eyes #TheFed

Good Morning Everyone!

Let’s see if I can help you in from the cold. Brrrrr…

This week, I’m going to focus once again on our weekly SFR data set, but also, I’m going to give you some perspective on Supply and Demand, and I’m going to give you my take on where we are in this Market Cycle. So, let’s get started.

We can see a very similar data set to last week and the week before right here. Remember, History tends to repeat…

New Listing (771) In my mind, this is not enough. We are already in short supply, and “Selling Season” is still in front of us.
Coming Soon (165) This will help, but not nearly enough.
Back On Market (198) This is too high. Somebody is not doing their homework here. Why are Buyers and Sellers walking away from nearly 20% of Contracts?
Price Increase (90) This is a common practice when the property goes Pending for more than the original List Price.
Price Decrease (493) Why are Sellers having such a hard time starting at the right price. Price reductions only serve to hurt the Seller.
Pending (1144) Holy Moly! This is almost a “Selling Season” number. Demand Marches Onward!
Withdrawn (132)
Leased (75)
Closed (605) Buyers and Sellers found their way to the closing table, but not in the numbers, I would have expected based on the number of Pending Listings.
Expired (147) Not many Sellers giving up this week. Positive sign.
One year ago to the day, I wrote,
“Long story short, I learned there is no such thing as an Average Market, but there is an average”.

The Compression Cycle for Buyers and Sellers as I see it right now is with each wave of lower rates, more Buyers hop in the market. When rates pop up, Buyers tend to lay back a little, and we see that with Pendings. We saw a dip in rates, and Buyers went to work this week.

The Compression Cycle for Sellers is much more difficult to predict. The SFR Market for sellers is so varied. Sellers Move Up, Move Down, Leave Town and Transition. It is very difficult to predict where we are in the Seller’s Cycle. Here’s my bet. We see Sellers becoming Buyers in this move up market in large numbers. We see the “Silver Tsunami” causing all kinds of friction in this market. Nationwide, 11,000 people turn 65 years old every day. Move Down and Transitional residential choices are not extensive. Finally, most people leaving town are moving for Job or Family. “Let’s take our profit in Denver and move back to family (Lower Priced Market). Or, “This Job is a great opportunity, it’s a lower priced market, and we can drive to Family rather than having to fly.” I will keep you posted as the Cycles change, but for now, this is a pretty good example of what’s happening.

Finally, #TheFed, has given us some clarity. The Fed is no longer here to support “Wall Street”. The Fed will tighten until we have Disinflation. Basically, consumers/families/businesses will begin to stop buying. I believe this is where we are now. Prices have risen so fast, consumption dollars have stopped chasing and are looking to substitute and/or even do without. The Timeline of this process is never easy. Having lived through 1978-1986 as an adult, there will be some fallout. Give yourselves a 3-5 year time horizon if buying. If selling, there will not be a better time to sell in the next 3-5 years.

In closing this week, Here’s what our Active Listing Inventory looks like.

With January closing out with just 3,605 Active Listings, our Supply and Demand will not be as rabid at 2022 or 2021, but it will be just as strong as the previous 8 years, which were GREAT Sellers’ Markets in their own right. Take it for what it is. Denver Metro has Demand and Supply Characteristics which favor the Seller moving into the Spring Market.

OK, that’s a wrap. Please call. Let’s take the time to understand your wants and needs. We are seasoned professionals in this market, and that will serve in your favor. Thank You!

About Tom & Dee Cryer

Your Trusted Advisors in the Homeownership Business! TheCryerTeam@Kentwood.com
This entry was posted in Denver Residential Real Estate and tagged . Bookmark the permalink.

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