Summit Colorado Fourth Quarter 2023 Market Report Report Written By: Elliot F. Eisenberg, Ph.D. Source: Summit Multiple Listing Service
Economic Overview Nationally By: Elliot F. Eisenberg, Ph.D.
In terms of the national economy, 2023 turned out much better than we could have hoped for at the beginning of the year. 23Q3 annualized real GDP growth came in at a stellar 4.9%, while 23Q4 growth is currently forecasted to come in between 1.5-2%. Overall, in the calendar year 2023, GDP growth will likely turn out to be around 2.4%, built on the strength of a strong labor market and solid consumer spending, with a late season assist from rising asset prices in general and the stock market in particular. We very fortunately avoided a recession in 2023, and inflation came down dramatically with help from improved supply chains, increases in the labor force participation rate, and increased legal immigration, as well as the Fed’s painful but necessary rate hikes.
“If inflation continues to slow and the labor market cools somewhat, the Fed will reward us with...” As we look towards 2024, it likely won’t be a year of significant economic growth with fiscal policy contractionary, and bank lending and thus the money supply contracting due to high interest rates. Importantly, consumer spending is likely to pull back because the current very low savings rate is not sustainable and must necessarily rise, and as more than 28 million borrowers have resumed payments on student loans. As an example of the financial stress on some households, the 23Q3 credit card delinquency rate was 8%, up from a low of 4.3% in 21Q3 and at its highest level since 11Q3 when we were extricating ourselves from the housing bust and the unemployment rate was a staggering 9.1%. Similarly, in 23Q3, 7.4% of auto loans transitioned into delinquency, up from their low of 5.0% in 21Q3. Seeing this much credit deterioration with a 3.7% unemployment rate is somewhat troubling. While the current bull market has been a boon to investors and household retirement accounts, equities are at or above historic P/E ratios, and it’s also an unusual market in that 72% of equities in the S&P 500 have underperformed the index, the highest level since at least 2000. As such, earnings will play a key role in stock market performance in 2024. Private-equity deal activity dropped from $1.44 trillion in 2022 to $846 billion in 2023, a decline of 41%. In 2021, private-equity deal-making exceeded $2 trillion, so there is plenty of room for growth in 2024, and as interest rates fall, we may start to see rising deal activity and IPOs. All signs are that the labor market continues to slowly soften. In November, job openings slumped to 8.8 million, from 10.8 million Y-o-Y and a peak of 12.0 million in March 2022. Thus, the number of available jobs/ unemployed person fell to a still high 1.4, but down from 1.8 Y-o-Y and a peak of 2.0 in March 2022. Relatedly, the quit rate is now 2.2%, down from 2.7% Y-o-Y and a peak of 3.0 in November 2021. The December jobs report provided mixed signals, with job creation at a solid 216,000 and unemployment unchanged at a low 3.7%. On the flip side, the labor force participation rate sank to 62.5% from 62.8%, suggesting that either the slowing job market is making job hunting less appealing or the pool of eligible workers is running low. With December wage growth up a strong 0.44% and Y-o-Y wage growth still too strong at 4.1%, the Fed will be keeping a sharp eye on labor markets before they contemplate rate cuts. If inflation continues to slow and the labor market cools somewhat, the Fed will reward us with rate cuts no later than June, hopefully slightly earlier. However, households and businesses with existing mortgages or business loans have thus far shown little sensitivity to interest rate changes because of their ‘locked-in’ low rates. That works in both directions, and as a result, the expected rate cuts may not be as stimulative as hoped. I suspect that with a little bit of luck, we will see GDP growth somewhere around 1% in 2024, with a reasonable possibility of a mild and shallow recession sometime during the year.
Housing Market Overview Nationally
Across the country, active inventories remain incredibly tight, largely due to the unwillingness of existing homeowners to forfeit their low current mortgage rate and venture out into the world of 6-7% mortgages. The last quarter of 2023, at least in terms of the housing market, was particularly tough as rates hovered near 8% for much of the fall while limited inventories kept pushing prices higher. During November, after annualization and seasonal adjustment, 3.82 million existing homes sold, up from a slightly worse 3.79 million in October, and that was the weakest monthly sales activity since August 2010, during the depths of the Housing Bust. With rates now south of their October highs, existing inventory improving, albeit slightly, and new single-family construction approaching pre-Covid peaks, home sales and mortgage applications should rise. However, as a potential warning light, some 45,000 home purchases fell through during November 2023, 16.9% of homes under contract, and the highest rate since recordkeeping commenced in January 2017. The previous record was the April 2020 Covid peak of 16.8%, while pre-Covid the rate was about 12.5%. This rise in cancellations may simply be cases of cold feet, but it could also be an indication that we are approaching the upper limit of many buyers’ finances.
“...the 2024 housing market will likely start out relatively weak and then improve gradually as the year progresses, especially as the...” In terms of new construction, a staggering number of new apartments will be brought online in 2024, and that is likely to push vacancy rates still higher and rents down. Add to that high interest rates, and thus high cap rates, and the multifamily market is likely to struggle in 2024. Still, while apartment vacancies hit 5.4% in 23Q4, up from 4.9% Y-o-Y, and near their pandemic peak of 5.5%, they’re not close to the 8% of 2010. By contrast, office vacancies hit 19.6%, surpassing the previous top of 19.3% set in 1986, when building was unstoppable, and 1991, during the S&L crisis induced recession. While builders have stepped up the pace of new home construction with the resolution of many Covid supply chain issues, high interest rates, materials inflation, and higher labor costs mean those homes are more costly to build, and as a result, they are likely to be higher end homes, as builders have limited incentive to build entry-level homes. In summary, the 2024 housing market will likely start out relatively weak and then improve gradually as the year progresses, especially as the Fed lowers rates and more potential sellers finally step off the sidelines. Importantly, the spread between the 10-year Treasury and the 30-year mortgage should fall because the fear of mortgage re-fi will decline as interest rates decline. Overall, 2024 is likely to be a year of transition for the housing market, better than 2023, but not by much, and we will probably have to wait until 2025 to see a return to pre-Covid activity levels.
Housing Market Overview Colorado
Unemployment in Colorado is 3.3% as of 11/23, up from last November’s 2.8%, after hitting a peak of 11.6% in 05/20 (for comparison, the pre-pandemic rate was 2.8%) and well below the U.S. national average, making it difficult for Colorado employers to fill positions. Statewide continuing claims for unemployment hit a high of 265,499 for the week ended 5/16/20 (compared to a pre-pandemic level of 20,735) and are now at 32,332 for the week ended 12/30/23, a year ago it was 29,038. Statewide, the December 2023 median price of a single-family home of $549,950 was 3.8% higher than December 2022, while the year-over-year average price rose 8.7% to $703,502. In the condo/townhome market, the year-over-year median price gained 3.0% to $424,995, while the average price increased 8.2% to $569,881. Through December, closed sales across the state are down 19.1%, while new listings are down 16.3%. There are 14,941 active listings statewide at the end of December, down 14.8% compared to December 2022, representing 2.1 months’ supply of inventory. Across the state, the percentage of list price received at sale was 98.1%, the same as last year and down from 98.7% at the end of September 2023, and days-on-market has increased to 62 days, up from 56 days last year, suggesting a market that is slightly weakening but still very strong.
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323 N. Main Street, Breckenridge, CO 80424 ChristiesSummitCORE.com | 970.344.9002
Breckenridge
27 Boulder Circle, Breckenridge 6 BEDROOMS | 8 BATHROOMS | 5,260 SF
Single Family Homes Median Sold Price
Average Sold Price
Total Dollar Volume
1%
2%
19%
$1,978,200
2022 vs
$2,397,569
2023
Avg Sold Price per SF
$754
2%
$739
$382,898,133
2022 vs 2023
Avg Days on Market
# of Properties Sold
92%
75
197
2022 vs 2023 Lowest Price Sale
$703,217
$472,321,065
2022 vs 2023
39
2022 vs 2023
17%
$2,438,842
20%
157
2022 vs 2023 Highest Price Sale
$2,000,000
2% $12,000,000
200 S High St, Breckenridge 4 BEDROOMS | 2 BATHROOMS | 1,614 SF
Condo/Townhomes Median Sold Price
Average Sold Price
Total Dollar Volume
12%
6%
6%
$1,025,000
$1,160,071
2022 vs 2023
2022 vs 2023 Avg Sold Price per SF
$1,027
31
0% 210
49
2022 vs 2023 Lowest Price Sale
2022 vs 2023
$262,500
# of Properties Sold
58%
$994
$258,331,678
2022 vs 2023
Avg Days on Market
3%
17%
$243,614,926
$1,230,151
210
2022 vs 2023 Highest Price Sale
$913,000
2%
$4,500,000
Keystone
Single Family Homes Median Sold Price
Average Sold Price
Total Dollar Volume
5%
0%
41%
$2,363,346
$2,533,184
2022 vs 2023
# of Properties Sold
Avg Days on Market
0%
41%
221% $686
29
$595,000
Lowest Price Sale
8%
17
93
2022 vs 2023
2022 vs 2023
$60,888,191
2022 vs 2023
2022 vs 2023
Avg Sold Price per SF
$689
$43,064,120
$2,537,008
24
2022 vs 2023 Highest Price Sale
$2,500,000
22%
$5,350,000
320 Tennis Club Rd #1306, Keystone 2 BEDROOMS | 3 BATHROOMS | 1,375 SF
Condo/Townhomes Median Sold Price
6%
$845,500
$902,003
2022 vs 2023
$879
18
2022 vs 2023
$196,636,634
$912,948
$115,031,425
2022 vs 2023
# of Properties Sold
150% 45
218
2022 vs 2023 Lowest Price Sale
$376,000
42%
Avg Days on Market
6%
11%
1%
2022 vs 2023
Avg Sold Price per SF
$833
Total Dollar Volume
42%
126
2022 vs 2023 Highest Price Sale
$795,000
Average Sold Price
2%
$2,265,000
Copper Mountain
Single Family Homes Median Sold Price
Average Sold Price
Total Dollar Volume
2%
15%
66%
$3,250,000
$3,807,515
$3,250,000
2022 vs 2023
2022 vs 2023
Avg Sold Price per SF
Avg Days on Market
16%
162%
$762
$881
13
2022 vs 2023
$3,000,000
2022 vs
$6,500,000
2023
# of Properties Sold
34
5
2022 vs 2023 Lowest Price Sale
0%
$19,037,574
60% 2
2022 vs 2023 Highest Price Sale
$3,300,000
36% $3,500,000
Condo/Townhomes Median Sold Price
Average Sold Price
Total Dollar Volume
7%
17%
3%
$912,500
$877,542
2022 vs 2023
$1,039
50
$475,000
# of Properties Sold
12%
32%
34
50
2022 vs 2023 Lowest Price Sale
2022 vs 2023
$45,053,599
2022 vs 2023
Avg Days on Market
11%
32%
$43,877,121
2022 vs 2023
Avg Sold Price per SF
$934
$1,023,945
44
2022 vs 2023 Highest Price Sale
$855,000
51% $3,175,000
Silverthorne/Dillon
4400 Lodge Pole Circle, Circle Unit 102, Silverthorne 391 Hummingbird Silverthorne 2 BATHROOMS | 758 | SF 3 BEDROOMS BEDROOMS || 2 3F, 1H BATHROOMS 3,036 SF
Single Family Homes Median Sold Price
Average Sold Price
Total Dollar Volume
4%
2%
6%
$1,894,468
$1,783,500
$1,858,868
2022 vs 2023
2022 vs 2023
Avg Sold Price per SF
Avg Days on Market
7%
62%
$625
$670
34
49% $275,000
$282,547,931
2022 vs 2023
# of Properties Sold
55
158
2022 vs 2023 Lowest Price Sale
2022 vs 2023
$299,325,914
4%
152
2022 vs 2023 Highest Price Sale
$1,715,145
24% $4,950,000
16 Fenwick Lane, Silverthorne 3 BEDROOMS | 4 BATHROOMS | 2,158 SF
Condo/Townhomes Median Sold Price
Average Sold Price
Total Dollar Volume
6%
3%
21%
$812,956
$750,000
2022 vs 2023
$705
19
$285,000
53%
278
29
17%
325
2022 vs 2023
2022 vs 2023 Lowest Price Sale
2022 vs 2023
3%
# of Properties Sold
Avg Days on Market
$696
$273,309,607
2022 vs 2023
2022 vs 2023
Avg Sold Price per SF
1%
$226,001,733
$840,953
Highest Price Sale
$707,500
17% $2,045,000
Frisco
Single Family Homes Median Sold Price
Average Sold Price
Total Dollar Volume
4%
9%
20%
$1,883,620
$1,887,000
2022 vs 2023
$736
38
$1,085,000
66%
63
30
2022 vs 2023 Lowest Price Sale
2022 vs 2023
4%
# of Properties Sold
Avg Days on Market
1%
$45,102,500
2022 vs 2023
2022 vs 2023
Avg Sold Price per SF
$727
$56,508,608
$2,050,114
27%
22
2022 vs 2023 Highest Price Sale
$1,822,710
29% $4,200,000
Condo/Townhomes Median Sold Price
Average Sold Price
Total Dollar Volume
1%
3%
9%
$1,113,933
$1,007,500
$1,084,918
2022 vs 2023
2022 vs 2023
Avg Sold Price per SF
Avg Days on Market
1%
113%
$817
15
$808
Lowest Price Sale
$350,000
$119,341,010
2022 vs 2023
# of Properties Sold
32
98
2022 vs 2023
2022 vs 2023
13%
$109,165,414
12%
110
2022 vs 2023 Highest Price Sale
$1,022,500
8% $2,250,000
Park County
1323 Valley Of The Sun Drive, Fairplay 3 BEDROOMS | 2 BATHROOMS | 1,792 SF
Single Family Homes Median Sold Price
Average Sold Price
Total Dollar Volume
5%
5%
17%
$607,882
$612,750
$640,242
Avg Sold Price per SF
Avg Days on Market
1%
82%
$373
44
$127,000
Lowest Price Sale
15%
# of Properties Sold
80
218
2022 vs 2023
2022 vs 2023
$110,121,699
2022 vs 2023
2022 vs 2023
2022 vs 2023
$370
$132,518,343
21%
172
2022 vs 2023 Highest Price Sale
$581,000
56% $3,350,000
83 Pelican Place, Como 2.1 AC - CAPTURE VIEWS OF THE TARRYALL MOUNTAIN RANGE
Land/Lots Median Sold Price
Average Sold Price
Total Dollar Volume
18%
23%
35%
$88,273
$49,250
Avg Sold Price per AC
$41,617
59
Lowest Price Sale
$6,000
# of Properties Sold
66%
98
404
2022 vs 2023
2022 vs 2023
$23,201,050
2022 vs 2023
Avg Days on Market
12%
33%
$35,662,152
2022 vs 2023
2022 vs 2023
$37,310
$68,238
16%
340
2022 vs 2023 Highest Price Sale
$59,900
83% $639,000
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