The Cotter Group’s Thoughts On The Current Market

Opportunity

There is incredible opportunity for Buyers right now. As the December ratifications close this month, we are seeing some of those deals.

Inventory Levels

Inventory is still very low…and though it is clear that demand is reduced from the ravenous pace of 2021 & early 2022, we are still seeing a low volume of homes.

The Perfect Homes Are Moving

Homes that check ALL the boxes are still moving quickly & sometimes for over asking price...but the less-thanperfect homes, or ones that do not check all the boxes, are lingering and buyers are coming in with lower offers.

CPI DATA & INFLATION

The Consumer Price Index (CPI) figures released on 1/12 were in line with expectations, and markets generally reacted favorably to the news. Month-over-month inflation hit the forecast number of 0.3%, and year-over-year core inflation continued heading in the right direction, coming in at the forecasted 5.7%.

Inflation Insight

Overall, we are seeing the FED rate actions working against inflation. While it is still higher than the FED target of 2.5%, it is significantly lower than the 9% number that we saw in Summer 2022.

Rates

Rates are down about 1.5% from their October highs. Conforming rates are hovering around 6%, and some jumbo rates are available lower than that, depending on the specific scenario.

Affordability

Affordability will continue to be a major challenge.

2023 Investment Opportunities

There is a move toward real estate investment & portfolio diversification as Buyers recognize they can invest in real estate in addition to their stock portfolios. Buyers see value in the ability to more closely control and manage real estate.

Employment

Employers will have more leverage than in past years, and commuting will become part of the conversation again.

Volume Of Closed Transactions

The number of closed transactions is down 21% for single-family homes & 30% for condos year-over-year. Keep in mind this is based on year-over-year data; when looking at November & December data, these numbers are higher.