Breckenridge December 2022 Market Update
The end of 2022 is quickly approaching and so it’s time to look back to see how the first 11 months of 2022 compared to 2021 in the real estate market.
2021 was one of the hottest real estate markets of the last few decades. Interest rates were historically low and large portions of the population chose to relocate or buy second homes. The economy was flooded with money after the government implemented drastic measures and increased the money supply through the pandemic. Meanwhile, the pandemic was winding down and many cash-flush people decided to escape big cities and head for the mountains of Breckenridge and Summit County.
USA Inflation Rate
2022 was a different story from 2021. Inflation quickly spiraled out of control as the effects of the diluted dollar took a toll on purchasing power. In turn the cost of everything from gasoline to food drastically increased in price and inflation hit about 10% on an annual basis. The Federal Reserve’s best tool for fighting inflation is increased interest rates - and they did. The Fed increased interest rates at the fastest pace on record through 2022. Average APR for a 30 year mortgage increased from 2.99% in Oct. 2021 up to over 7% in Oct. 2022.
USA 30-Year Fixed Rate Mortgage Avg.
Higher interest rates took a major toll on the purchasing power for buyers in the Breckenridge market and beyond. A large share of buyers were priced out of the market as the cost to borrow increased. The number of Breckenridge single-family homes sold in the first 11 months of 2022 decreased from over 300 down to 187 (-40%), when compared to 2021. However, price remained steady with the average selling price for a Breck single-family home increasing by 7% to $2,381,076.
Breckenridge SFH Sales
2023 is now approaching quickly and we wonder what comes next. Nobody knows for sure but the Federal Reserve has been signaling that they plan on decreasing the size of rate increases and potentially stopping the interest rate increases early in 2023. Inflation appears to be cooling. Will buyers step back into the market if rates steady of decrease further?
