As we enter this new year it is fair to ask, what’s going on in the Platt Park Real Estate Market? If you pay any attention and read real estate headlines than you know they are all over the place telling sometimes contradictory stories of where we’ve been and are going. Let’s see if we can make a little sense of it all.
2022, A Tale of Two Markets
In my twenty years selling homes in Platt Park, I’ve never seen the market shift so dramatically and suddenly as it did in 2022. The year began with an extreme seller’s market. It was common for homes to have ten offers and sell for 10 even 20% over asking. It was nothing to see some of my listings have 50 or more showings in three days. An unexpected consequence however was sellers were hesitant to sell fearing being stranded, unable to find a replacement home. As a result, the number of sales were down from a year ago, almost 20%.
Everything however took a dramatic shift in June when interest rates spiked and there were multiple fears about the economy. Simply put the market came grinding to a near halt where it has largely remained. To give a sense of that pivot, through July there were 109 sales in Platt Park, since then there have been only 35. Interestingly, through that time, values have not really dropped significantly, it is just that things stopped moving altogether. So in the end as we look at the year as a whole here are a few highlights:
- Overall home values for the year are still up over 10% from a year ago
- We hit a new high sales price with a single-family home on Ogden selling for $2,929,000
- For the first time the average sales price for all Platt Park homes tipped over $1,000,000
Those last two numbers are, at least to me pretty staggering. It was only in 2015 that Platt Park saw its first million dollar sale and now that is the average sales price. Blowing through the price ceiling of almost three million is also amazing. When we purchased our personal home in Platt Park back in 2004 the average home value in the neighborhood was around $250,000 and no homes were approaching a million dollars in value. Amazing.
So What Does 2023 Hold in Store for the Real Estate Market in Platt Park?
If you pay attention to the mountains of reports you know predictions range all over the place. Are we on the precipice of a housing crash? A correction? Neither of those? Here are my thoughts on the market conditions related to Platt Park.
Housing is in short supply and demand is strong–especially in Platt Park! Those two principles remain unchanged in our market. Denver has been in a significant housing shortage for a decade—that’s why giant apartment buildings keep popping up like dandelions in spring around here. They are not building any more Platt Parks so demand remains strong while supply is tight. Even if buyers have somewhat backed off the desire to live and buy in Platt Park remains high.
Crashes happen, like in 2008 when there are deeper problems but the issues of 2008 are not present today. Many homeowners were upside down in ‘08’ (owing more than their homes were worth) trapped in bad mortgages which led to an unprecedented number of foreclosures. Not the case today as most homeowners are sitting on considerable equity and low interest mortgages. Moreover the economy is strong, job growth continues at a solid pace, unemployment is low. None of those indicators point to a crash of home values.
High interest rates and inflation put a damper on things but in the end, people still need housing. There are encouraging signs inflation is easing and mortgage rates will (and have) trended down but regardless housing is a fundamental need. Buyers and sellers that need to make a move can delay for a time but pressure builds and it eventually overcomes the negatives and things will get moving. It always works that way. There have been plenty of times historically where a 7% interest rate was considered pretty good for a 30 year mortgage. I think that number will trend down as inflation gets under control but even if it stays there buyers will adjust and move forward with plans to purchase homes.
In conclusion, I think home prices will be fairly stable in 2023. Homes will take longer to sell this year and demand will not be like it was in the recent past but I don’t expect a big price drop-off–perhaps more of a mild correction of around 5%. It will be a more balanced market favoring neither seller or buyer which is actually healthy.
If you are planning to sell, accurate pricing, marketing and properly preparing a home will be crucial for success. Buyers will be able to be a bit more picky so positioning your home well in the market will be crucial. Those are the areas we specialize in as your Platt Park experts. Give us a call, we’d be happy to discuss all this in detail when you are ready.
Happy New Year and we’ll see you around the neighborhood