The Montrose real estate market has renewed since the most dismal winter for home sales on record. Improving since January’s lull, home sales have continued to mirror market activity similar to last spring. The median sale price for May was $480K or 0.54% higher than last spring, while tracking a 3-month trend. Unit sales, despite the freeze in January, are now equal with last spring as well. Apart from anything monumental, the local Uncompahgre Valley housing market is expected to keep a mild trend similar to 2023.
The luxury market in our area has gained momentum and is now touting around 6-months of inventory. This means that there were an equal number of buyers and sellers for this market in the month of May. Of the 12 luxury properties sold last month, 66% were cash buyers. Cash buyers, not dependent on mortgage rates, is a logical explanation of why and how this price range is moving more quickly than expected.
New housing inventory has been slowly increasing, since the all-time inventory low in the spring of 2022. As new product hits the market, buyers are jumping back onto the field after a winter hiatus, though current mortgage rates are still a challenge for many.
Mortgage rates are obviously still keeping the market subdued, with the 30-year fixed conventional mortgage hovering around 7%. Wells Fargo has predicted mortgage rates to drop to 6% by year’s end. The National Association of Realtors have also predicted a near 100 BPS decline in mortgage rates by year’s end. Although these forecasts are welcome, and lower rates would be great for monthly affordability in the short run, inflation still seems quite sticky. Therefore, the expectation that the Federal Reserve will begin cutting rates in the fall seems premature. The unfortunate scenario, that would match a significant drop in mortgage rates (sub 6%), would be a restart in rapid home price appreciation (housing inflation). And this is all due to suppressed inventory levels, specifically in the non-luxury (sub $700K) housing market. On a positive note, we hope to see more inventory come available as the lock-in-effect of lower mortgage rates, from the previous decade, fade due to life circumstances.
Click Here to View Residential Sold – May
