The shift in the market has continued this month. Due to a drastic rise in mortgage interest rates, the key indicators in the market have changed. The biggest change I have seen so far is in the number of sales occurring. Sales are down 22% for the year and in October sales dropped from 486 a year ago to 294 (Boulder County single family and attached), a 39.5% decline! Homes are staying on the market longer and negotiations are now favoring the buyers. Very few homes are selling for above the list price. In October, the average sale closed for 3.1% lower than the asking price. In October 62% of the sales closed for a price below list price. Six months ago, just 10% of the sales closed for below the list price.
The major problem for buyers is affordability. Interest rates have doubled over the past year while prices are higher than they were a year ago. This leads buyers to either reduce their price range, make a larger downpayment or pause their search and hope that both interest rates and prices fall enough for them to buy the type of house that they wanted to in the first place.
Real estate prices tend to be sticky, meaning that sellers are reluctant to lower their prices, but it seems that there are a number of factors in play that would point to a softening in prices going forward.
See the slide show below for more detailed statistics.
