Market Update
2022 RECAP
The beginning of 2022 continued the 10-year run of increased home prices. Seriously… 131 consecutive months of increasing home prices!
Core Logic reports an average equity increase of $64,000 for U.S. homeowners with a mortgage from Q1 2021 to Q1 2022. Price increases cooled in Q3 2022 from Q3 2021 due to interest rate hikes for an average increase of $34,300 per mortgagee. Home sales began to slow. The end of 2022 saw a slight uptick in home sales because of a dip in interest rates in November and December.
WHAT LIES AHEAD?
—From NAR Realtor Magazine, December 14, 2022
Lawrence Yun, Chief Economist, National Association of Realtors
Yun predicts home sales to fall by 6.8% in 2023 compared to 2022, with the brunt of the slowdown to occur in the first quarter of the new year. Some of the softening can be attributed to homeowners who are unwilling to trade in a higher mortgage rate, as well as economic uncertainty. Meanwhile, home prices in 2023 are forecast to reach $385,800, an increase of 0.3% compared to 2022.
“After a big boom over the past two years, there will essentially be no change nationally” in home prices in 2023, Yun said. “Half of the country may experience small price gains, while the other half may see slight price declines.” He pointed to markets in California, like San Francisco, that may be the exception. The Bay Area could register double-digit price drops of 10% to 15% next year, Yun added.
“Mortgage rates are the lifeblood that drive home sales,” Yun said. For the last four weeks, rates have been dropping after reaching 7.08% in November. On Tuesday, the Consumer Price Index offered hope that inflation is further cooling, prompting the Federal Reserve to start slowing the hikes to its benchmark interest rate.
Yun said he believes mortgage rates may have already peaked. He points to an “abnormally high spread” between 30-year fixed-rate mortgages and the Treasury, which historically are more closely tied together. “As the mortgage market normalizes, it will be an opportunity for rates to decline even further,” Yun said, adding that he expects mortgage rates to settle at 5.7% by the end of next year. Still, mortgage rates are more than double what they were a year ago, ramping up rapidly this fall and walloping housing affordability. But if inflation continues to slow and rates stabilize, that could bring more buyers back to the market and boost demand for housing, Yun said.
KAYENTA VALUE PROPERTY REPORT
2022 year-end stats
HOMES
0%: 2022 HOMES SOLD: 23
+ 22.8%: 2022 HIGH SOLD PRICE per sq ft: $711
+ 8.5%: 2022 AVG. SOLD PRICE per sq ft: $461
+ 34%: 2022 LOW SOLD PRICE per sq ft: $296
+ 5.6%: 2022 AVG. SOLD PRICE: $1,363,913
- 90%: 2002 AVG. CUMULATIVE DAYS ON MARKET: 9
LOTS
- 50%: 18 sold in 2022 from 36 sold in 2021
+ 45.7%: $446,227 Avg. Price per acre over 2021
+6.7%: $950,000 High sold price per lot over 2021
+48%: $259,000 Low sold price per lot over 2021
- 20.7%: Avg. cumulative days on the market from 2021
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