top of page
Search
Writer's pictureHeather Lupton
Nov 2, 20224 min read

November 2022 Market Update & Local Events


 

Fall is my favorite time of year here in the Bitterroot Valley.

The changing of the leaves, the crisp morning air, complete with tons of festivities to enjoy.

 

Check out some of November's Ravalli County community events below, along with a local business spotlight.


In addition, Renee Endicott from Capital Family Mortgage is also providing a mortgage rate update for your viewing pleasure.

November Community Events

Featured Local Business

Mortgage Update


 

The real estate market is shifting.

Here's what you need to know to navigate the changing market.

 

Last week marked new 20 year highs for mortgage rates. Also noted is that bond trading was breaking down into a somewhat panicked state. The panic ended on Friday after a Wall St. Journal article suggested that while the Fed would hike by the expected 0.75% at the next meeting, they would also be debating the size of future rate hikes due to growing doubts about what has thus far been a "full throttle" approach. Only about an hour later, one the last Fed speakers of the week, Mary Daly made similar comments in a scheduled appearance.


With that, the market immediately began trading "the Fed pivot." This simply refers to a shift away from what has been the fastest pace of rate hikes since the early 80s. But whereas "pivot" might imply a move in the opposite direction, it's important to understand the limitations of this particular pivot.


Most importantly, the Fed has been very clear in saying they intend to hold rates at a terminal level (fancy banker talk for "ceiling") for as long as possible in order to be absolutely sure that inflation is defeated. Naturally, opinions vary on whether that's even necessary, but the Fed has their reasons for not wanting to risk doing too little.

In other words, the "pivot" is really just a deceleration of the rate hike pace. A plateau at what will be the highest Fed Funds Rate since 2007.


Rate expectations spike after inflation surprises and then level off to wait to see if there will be another surprise. We're very much in a waiting phase right now. Additional clarity comes next week not only from the Fed announcement, but also from economic data.


In addition to inflation, the Fed cares about economic data because a weakening economy would provide evidence that its anti-inflation policies are working. Some reports are more important than others in that regard, and next week's jobs report on Friday is arguably the most important apart from CPI (the Consumer Price Index which serves as the first major look at inflation for any given month).


In addition to the jobs data, there are several other relatively important reports next week. If they paint a generally gloomy picture, that's bad for the economy, but good for rates. If they're surprisingly upbeat, rates could see some more upward pressure. Either way, it will be the following week's CPI report for the month of October that casts the final vote on whether it's really time for a big pivot in 2022's rising rate momentum.


Pending home sales dropped sharply. This is the most timely of the big-ticket home sales reports as it measures contract signings as opposed to finalized sales.


New home sales are just that: new construction. They'd spiked abruptly last month as builders held fire sales in the face of rising rates, but snapped back to reality in the most recent numbers.


Home prices are still strongly positive year-over-year but falling at a quick pace in month-over-month terms. This is expected, and arguably necessary if you agree that price gains were overdone by the end of 2021. The ability for prices to make a soft landing without significant year over year declines will depend on geographical specifics as well as the way the rate narrative unfolds in 2023 (and inflation, and inventory, and incomes, and... you get the point. It depends.).


Information regarding this market update compiled from Julie Lapham with Mann Mortgage in Missoula.



 

Above are some metrics for your viewing pleasure as well.


Some key items to note from September 2022 vs September 2021:

  • New listings increased by 12.7% from 2021

  • Pending sales declined 18%

  • Closed sales declined by 35.1%

  • Days on market increased by 167.7% to 83 days vs 31 days in 2021.

  • Median sales price is up by 11.6%, but percent of list price received is down by 1.9% meaning buyers have more negotiating power than they did in 2021.

Year-to-date data to note:

  • New listings are still up by 2%

  • Pending sales are down overall 15.2%

  • Closed sales are down 15.7%

  • Days on market have increased 66%

  • Median sales price is still up 23.5%.

  • Percent of list price received is down 1%.


Overall, the Bitterroot Valley is still a very desirable place to live. That being said, the market is normalizing. Real estate is always a good investment, but whether or not it is a good time to buy or sell may vary based on your individual circumstances. The market is still strong for sellers, but buyers have much more negotiating power than they did in 2020 and 2021. Most recently, we've seen seller credits for buying down interest rates.


Have questions or suggestions for future updates? Contact us today.



23 views0 comments

Recent Posts

See All

Comments

bottom of page