Spring 2023 | Mesa Verde Market Report

How’s the spring season shaping up for Mesa Verde real estate? Normally, our spring market typically will begin once the Super Bowl has ended in mid-February. We typically see listings start to trickle on the market in late February, with an increase in March and significant ramp up in March, April, and May leading to the summer season.

 

 

Well, this Mesa Verde spring season is currently shaping up to be great for sellers, and maybe not so great for buyers.

 

As of this writing, we have a total of 17 properties on the market.

 

We have one other home that has been on the market but now is currently on “hold” status, while the owner has taken the home off of the active market temporarily.

 

 

Historically, we typically see a very big ramp up of activity for Mesa Verde active homes and condos in the spring, especially in the March and April months. That is simply not happening this year. It appears as if our trend is reverting back to 2019, prior to the pandemic when people remain attached to their homes and condos and are not moving. The total homes that are active currently (actively for sale, without an offer) is extremely low. Comparatively, if we look back 15 + years ago, the active inventory was around 30-45 homes for buyers to pick from across all price ranges and neighborhoods.

 

So the trend that has happened slowly over time has really only gotten more challenging for Real estate agents and buyers here in Mesa Verde. Little to no inventory, and competition on the best properties in terms of multiple offers for sellers.

 

And because of lack of inventory, we have maintained prices in Mesa Verde. When the Federal Reserve began raising interest rates, the expectation was that the prices in the Mesa Verde market would come reeling back to earth.

 

The Federal Reserve had hoped that the raise in interest rates over the past year would slow the real estate market, and it certainly has had some effect in that area. As rates have risen to 7% for mortgages in October 2022 and recently in March of this year, real estate activity has waned significantly. As rates ebb and flow, and drop back into the high 5% range, buyers do come out and are actively buying property. But there sure isn’t much to pick from.

 

The Fed’s mistake in retrospect is that the significant lowering of interest rates during the pandemic in 2020-2021 has produced a market that is “stuck”. Most owners are simply not moving. The most significant issue that the Mesa Verde real estate market is dealing with in Spring 2023 is the fact that a large majority of smart homeowners were able to refinance their properties (if they still had a mortgage) during the pandemic and many of them have rates in the high 2% to low 3% range now. Consequently, owners who would think of moving up to a larger home, or retiring to a smaller home do not have incentive to do so because their current rate and payment is great. A change in interest rate on a new purchase effectively doubles their payment, making a move out of the question right now.

 

Smart sellers who had planned on selling during this time still have high prices on their sides, and can cash out effectively as they would have a year or two ago. Prices have barely decreased from where they were last year, and in some cases record prices are still happening in certain Mesa Verde categories.

 

A well positioned property still can receive significant interest and a high price.

 

Buyers have little to pick from, but smart buyers will wait and strike once they see “the right one”. Buyers are having to come to grips with the fact that prices are likely not going to fall any more this year. Most major predictions have the Costa Mesa real estate market coming down another 1.5% this year.

 

Smart buyers are using the mortgage tools such as Adjustable Rate Mortgages (ARMs) as tools to get into a home and lower their initial monthly payments, while hoping for a return to lower rates in the future whereby they can refinance into a permanently lower rate.

 

Summer appears like it won’t be any different. Due to higher interest rates, it appears as if lower inventory is the new normal, and sellers will mostly maintain the upper hand with Mesa Verde real estate.

 

Need help with Costa Mesa real estate? Colin Delaney has 20 years experience, and knows the best real estate in Costa Mesa. Reach him by call/text at (714) 743-9882 or his email.