First Half of 2022 Market Report | Christie's International Real Estate Summit Colorado

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SUMMIT COLORADO SECOND QUARTER 2022 MARKET REPORT Report Written By: Elliot F. Eisenberg, Ph.D. Source: Matrix Multiple Listing Service

ECONOMIC OVERVIEW

Nationally

By: Elliot F. Eisenberg, Ph.D.

This has been a painful half-year for the U.S. economy, with 22Q1 GDP declining at an annualized rate of 1.6%.

At this point, the best-case scenario for 22Q2 is for very slight growth, around 1% or so, but it is more likely to come in flat or slightly negative as the economy continues to be battered on multiple fronts. While the impacts of Covid-19 had been declining, they may be re-emerging, both in the US and globally, and supply chain issues, while improving, remain very troubling. Inflation is extremely high and is impacting household incomes. In fact, national real income has been declining since the fall of last year. Household savings, which had been near record highs, have declined, especially in lower-income households, and consumers are spending less. Fuel prices remain near record highs, negatively impacting both households and businesses, and the stock market posted the worst half-year since 1970, with both stocks and bonds performing poorly. Monthly employment growth remains strong, although first-time jobless claims have noticeably risen.

“The projected decline in inflation is unlikely to be fast enough to change the Fed’s rate-raising trajectory and certainly not after the recent strong jobs data. ” Collectively, this is a lot to overcome, and the forecast for GDP growth for CY2022 is, at best, 1%, with the probability of a recession sometime in 2023 at 75%. The good news - the economy entered this troubling situation in a much stronger condition than usual. Corporate balance sheets are strong, household finances are objectively good, and banking institutions are solid. If we do wind up in a recession, this is in no way a repeat of the Great Recession of 2008/2009. Current expectations are that inflation will top out no later than 22Q3, pulled back by both the Federal Reserve Board’s interest rate hikes, some organic improvements to supply chains, and slowing consumer demand, especially for goods.

That said, the projected decline in inflation is unlikely to be fast enough to change the Fed’s rateraising trajectory and certainly not after the recent strong jobs data. Moreover, inflation has become increasingly economy wide and is no longer contained to autos, energy, and food.

As a result, the Fed has made it quite clear that they will continue to raise rates due to worsening inflationary pressures even if it pushes the economy into a recession. They have signaled intentions to raise the fed funds rate every six weeks for the near future (perhaps for as long as a year) with the next several hikes in the 0.5%-0.75% range and then 0.25% until the inflation target rate is in sight.

If inflation data does not worsen, the Fed will not meaningfully alter the current course, and 10-year Treasury and 30-year mortgage rates should not meaningfully change from where they are now. Of course, if inflation gets significantly worse, the Fed will tighten monetary policy further. Conversely, should inflation dissipate more quickly or if the economy stalls or falls into a recession, the Fed might institute fewer or smaller rate hikes, or stop rate hikes earlier than they would otherwise. Regardless, expectations of inflation went up rapidly in the first half of 2022, and rates are more likely, if anything, to fall from where they are now than rise.

HOUSING MARKET OVERVIEW

Nationally

There are several key factors to watch in the housing market for the rest of 2022. First, while mortgage interest rates are unlikely to rise significantly higher than they are now, we are already starting to see the impacts of rising rates on the housing market. May closed sales, based on contracts from March and April when rates had increased somewhat, already show signs of slowing, and with higher mortgage rates since, sales activity is likely to show additional declines. In addition to interest rate impacts, softening in the job market, reduced household savings, and falling equity prices will slow sales. We already see this in data for weekly applications for first-time mortgages, which continue to decline on a relative basis compared to pre-pandemic levels.

“Demand for housing is still high, and demographics remain favorable.

Further, even if individual buyers get priced out, Wall Street is still buying homes for rentals, which puts a floor under price appreciation. ” Another meaningful change of late in the housing market is the rise in year-over-year inventories for the first time since early 2019. However, inventory growth, while high in percentage terms, in actual units remains relatively small. At the national level, available inventories are at 1.16 million units, still well below normal pre-pandemic levels. Price appreciation through the first half of the year was surprisingly strong, much stronger than most economists had predicted. However, higher home prices and interest rates will manifest in slowing rates of home price appreciation, which is likely to shift from 15-20% over the past year to closer to 5-7% by the end of the year. If inflation is considered, real price appreciation may be around zero.

In terms of new housing supply, new construction of multifamily properties will continue to do well but perhaps soften slightly because of tightening credit conditions.

Single-family starts are likely to decline somewhat from where they are now, but not by much. The number of single-family units under construction is relatively high, but that is less because of new starts and more because builders have been unable to complete homes under construction due to supply chain issues.

Demand for housing is still high, and demographics remain favorable. Further, even if individual buyers get priced out, Wall Street is still buying homes for rentals, which puts a floor under price appreciation. Thus, even if there is a recession, there will be fewer impacts on the housing market because we have never been this undersupplied going into a recession, nor have so many homeowners had so much home equity. The bottom line, this housing market is still a seller’s market, but less so than it has been for the past few years.

BRECKENRIDGE

27 Boulder Circle, Breckenridge 6 BEDROOMS | 7.5 BATHROOMS | 5,260 SF

Single Family Homes Median Sold Price

Average Sold Price

19%

$2,062,500

2021 vs

$2,044,421

2021 vs

2022

Avg Sold Price per SF

$754

2021 vs

44

27%

$565,987

2022

$234,506,949

2021 vs

2022

Number of Properties Sold

52%

2021 vs

2022 Lowest Price Sale

$609

$286,219,004

$2,442,781

Avg Days on Market

24%

18%

21

141

2022

32%

2021 vs Highest Price Sale

34%

$1,544,250

Total Dollar Volume

28%

$12,200,000

96

2022

325 Four O’clock Road Unit #D-304, Breckenridge 2 BEDROOMS | 2 BATHROOMS | 1,094 SF

Condo/Townhomes Median Sold Price

Average Sold Price

$770,000

2021 vs

$965,000

$944,254

2021 vs

2022

Avg Sold Price per SF

30%

2021 vs

$1,055

36

2022

32%

$315,000

$186,018,136

$1,202,253

2022

Avg Days on Market

$128,641,027

2021 vs

2022

Number of Properties Sold

50%

2021 vs Lowest Price Sale

$809

31%

27%

197

18

2022

46%

2021 vs Highest Price Sale

25%

Total Dollar Volume

21%

$4,400,000

107

2022

KEYSTONE

Single Family Homes Median Sold Price

Average Sold Price

$1,820,000

33%

$2,507,500

2021 vs

$1,939,615

2022

2021 vs

Avg Sold Price per SF

$667

2021 vs

35

24% $550,000

2021 vs

2022

$25,759,120

2022

Number of Properties Sold

23%

2021 vs

2022 Lowest Price Sale

$541

$25,215,000

$2,575,912

Avg Days on Market

23%

2%

14

27

2022

29%

2021 vs Highest Price Sale

38%

Total Dollar Volume

9% $4,375,000

10

2022

22714 US Highway 6 Unit #5940, Keystone 2 BEDROOMS | 2 BATHROOMS | 838 SF

Condo/Townhomes Median Sold Price

Average Sold Price

41%

$802,500

2021 vs

$641,064

2022

2021 vs

Avg Sold Price per SF

$821

2021 vs

53

2022

8% $270,400

2021 vs

2022

$105,004,654

2022

Number of Properties Sold

81%

2021 vs Lowest Price Sale

$627

$100,005,929

$905,213

Avg Days on Market

31%

5%

10

157

2022

26%

2021 vs Highest Price Sale

32%

$607,000

Total Dollar Volume

18% $2,300,000

116

2022

COPPER MOUNTAIN

Single Family Homes Median Sold Price

Average Sold Price

3%

3%

$3,750,000

2021 vs

$3,850,000

2022

2021 vs

Avg Sold Price per SF

$766

4

2022

22% $3,000,000

$3,850,000

2022

2021 vs

2021 vs

$15,931,074

2022

Number of Properties Sold

225%

27%

2021 vs

$3,982,769

Avg Days on Market

Lowest Price Sale

$605

314%

13

1

2022

300%

2021 vs Highest Price Sale

$3,850,000

Total Dollar Volume

41% $5,431,074

4

2022

Condo/Townhomes Median Sold Price

Average Sold Price

5%

3%

$725,000

2021 vs

$743,367

2022

2021 vs

Avg Sold Price per SF

2021 vs

$871

14

2022

8% $300,000

$41,628,542

2022

2021 vs

$26,901,862

2022

Number of Properties Sold

14%

2021 vs Lowest Price Sale

$708

$768,625

Avg Days on Market

23%

35%

16

56

2022

38%

2021 vs Highest Price Sale

$692,500

Total Dollar Volume

26% $1,550,000

35

2022

SILVERTHORNE/DILLON

649 Fly Line Drive Silverthorne 3 BEDROOMS | 3 BATHROOMS | 1,876 SF

Single Family Homes Median Sold Price

Average Sold Price

36%

39%

$1,432,529

$1,830,000

2021 vs

2022

2021 vs

Avg Sold Price per SF

$609

2021 vs

23

2022

22% $485,000

$147,550,486

2022

2021 vs

$141,491,810

2022

Number of Properties Sold

43%

2021 vs Lowest Price Sale

$506

$1,992,842

Avg Days on Market

20%

4%

33

103

2022

31%

2021 vs Highest Price Sale

$1,344,840

Total Dollar Volume

71% $6,500,000

71

2022

Condo/Townhomes Median Sold Price

Average Sold Price

25%

$631,868

$688,250

2021 vs

2022

2021 vs

Avg Sold Price per SF

25

$686

2021 vs

2022

20% $211,277

2021 vs

2022

$107,169,412

2022

Number of Properties Sold

52%

2021 vs Lowest Price Sale

$502

$137,115,421

$788,010

Avg Days on Market

37%

22%

217

12

37%

2021 vs

2022 Highest Price Sale

17%

$590,000

Total Dollar Volume

80% $2,389,000

136

2022

FRISCO

Single Family Homes Median Sold Price

Average Sold Price

26%

$1,862,786

$2,100,000

2021 vs

2022

2021 vs

26%

10%

2022

21% $1,350,000

2021 vs Lowest Price Sale

2021 vs

10

2021 vs

2022

Avg Days on Market

$782

$26,079,000

$2,241,591

Avg Sold Price per SF

$621

5%

20%

$24,657,500

2022

Number of Properties Sold

11

14

2022

21%

2021 vs Highest Price Sale

$1,662,500

Total Dollar Volume

2% $3,250,000

11

2022

Condo/Townhomes Median Sold Price

Average Sold Price

$767,050

34%

$1,000,000

2021 vs

$828,259

2022

2021 vs

Avg Sold Price per SF

$834

2021 vs

7

2022

57% $410,000

$53,008,549

2022

2021 vs

$54,389,614

2022

Number of Properties Sold

43%

2021 vs Lowest Price Sale

$627

$1,109,992

Avg Days on Market

33%

3%

4

64

2022

23%

2021 vs Highest Price Sale

30%

Total Dollar Volume

15% $2,192,850

49

2022

PARK COUNTY

71 Sheep Ridge Road, Fairplay 3 BEDROOMS | 3 BATHROOMS | 2,076 SF

Single Family Homes Average Sold Price

23%

$503,100

$525,279

$620,000

2021 vs

26%

Avg Days on Market

24%

0%

$384

2021 vs

2022

90% $275,000

Lowest Price Sale

2021 vs

40

$58,305,923

$66,692,350

2021 vs

2022

Avg Sold Price per SF

$311

14%

$660,320

2021 vs

2022

Total Dollar Volume

2022

Number of Properties Sold

40

111

2022

9%

2021 vs Highest Price Sale

Median Sold Price

108% $2,150,000

101

2022

Condo/Townhomes Average Sold Price

100%

$649,000

$731,333

$0

2021 vs

Avg Sold Price per SF

100% $0

2021 vs

195

100% $0

$2,194,000

2021 vs

2022

$0

2022

Number of Properties Sold

100%

2021 vs

2022

100%

$0

Avg Days on Market

Lowest Price Sale

$244

100%

2021 vs

2022

Total Dollar Volume

0

3

2022

100% 0

2021 vs Highest Price Sale

Median Sold Price

100% $0

2022

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