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So typically we do a weekly question and answer on the “Ask Dave” column, but this week we are going to review my 2023 predictions to see how I scored with my crystal Ball…..and next week I will provide my 2024 predictions!

To be honest, good riddance to 2023 as 2024 feels overdue so we can turn the page on a lackluster year in real estate.  Let’s get right to it.   

Here were my predictions for 2023 and how they each played out…….

1.   Our market will continue to NORMALIZE!!

I am going to say I got this one wrong, as it did not play out how I envisioned.  I thought we would see prices take a slight downward turn, but they certainly did not go down and more than held their own….overall we saw slight increases in the 3% neighborhood.  I certainly did not anticipate price increases, but the number of sales did “normalize” with a fairly consistent 20% decrease in monthly sale numbers. 

2.   We will not see a plethora of foreclosures.

I would say this is one I got right.  We did not see a spike in foreclosures.  Historically they are still very low and nothing like what the Western Slope experienced in 2009-2012.  The tightened lending requirements have significantly reduced those who purchased a home in the past few years from being “over-leveraged” 

3.   Interest rates will most likely be volatile early on in 2023, but hopefully, settle in the upper 4% to lower 5% range in the back half of the year. 

This one I got WRONG!  In no way did I see interest rates peaking in 2023 above 8%, but that is exactly what they did.  Interest rates have been much higher than I ever expected and thus have significantly cooled the housing market.  The artificially low interest rates of 2020-2022 have had a significant impact on homeowners selling their current homes and that lack of inventory has helped maintain prices. 

4.   We will see new construction continue to slow down.

This one was spot on……with the exception of Multi-family projects which are seemingly going up on every corner.  With the higher interest rates, new single-family building permits were off by 50%.  The pullback from buyers caused new home builders to pull back from their anticipated “new starts” and further decrease inventory levels.  The upper-end market (“custom homes”) remained fairly robust from a building and resale perspective, but those with cash still have cash and they are not afraid to spend it on what they want.  Multi-family projects continue to defy logic, but there must be a demand that I cannot see. 

5.   We will see the demand for investment properties remain strong! 

Again, this was spot on.  The interest in investment properties has remained very strong throughout 2023, although interest has waned in the last couple of months…..which coincides with the spike in interest rates.

6.   Renting will become more and more attractive.

Let’s be clear, this prediction was “low hanging fruit” as the rise in interest rates was already impacting affordability at the end of 2022 when rates were 5%…..let alone when they spiked to 7%-8%.  The bottom line, renting is not necessarily more attractive, but certainly, in many cases, more affordable.

7.   We will continue to see that the secret of the Western Slope is out. 

Got this one right….again, “low hanging fruit” as the Western Slope is very much on the national radar.  As quality of life continues to be valued we will continue to see growth!  We could not ask for a better place to live and many now know that is true and want to share the experiences we have valued for years. 

There you have it, 5 out of 7 is not bad. The “Great Carnac” I am not, but that was 2023 in the rearview mirror… week we will look through the windshield to 2024.  

Happy New Year!

Dave Kimbrough
The Kimbrough Team



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