August 2022 Newsletter

January 26, 2023

14 years of under building a major factor in the lack of homes for sale

Even though inventory is increasing this year as the market moderates, supply is still low. For the last 14 years, the number of new construction homes has lagged significantly below the 50 year average.

The graph represents the years leading up to the housing crisis in 2008. As the graph shows, right before the crash, homebuilding increased significantly. That is because buyer demand was so high due to loose lending standards that enabled more people to qualify for a home loan.

The resulting oversupply of homes for sale led to prices dropping during the crash and some builders leaving the industry or closing their businesses – and that led to a long period of under-building of new homes.

Bottom Line: unless new home construction increases exponentially, experts project home price appreciation will continue. It will just happen at a more moderate pace as the housing market continues its shift back toward pre-pandemic levels.


As you know by now, the Federal Reserve increased the Federal Funds Rate (FFR) by another .75% last Wednesday. Here's what that really means: Inflation is the arch enemy to mortgage rates. When the Fed hikes rates, they are taking proactive steps needed to alleviate inflationary pressures. Mortgage rates usually decrease vs. increase when the fed raises the FFR. So, this Fed hike is actually good news for mortgage rates.Looking back over the year, each time the Fed has hiked rates in March, May, June, and now July, mortgage rates have either stabilized or improved after the announcement. While it is possible that mortgage rates may increase as new inflation numbers are released, it is important to note that Fed rate hikes do not generally translate to increased mortgage rates.


The frenzy the market saw during the pandemic is because there was more demand than homes for sale. That drove home prices up as buyers competed with one another for available homes. And while buyer demand has moderated today in response to higher mortgage rates, data tells us demand will continue to be driven by the large generation of millennials aging into their peak homebuying years Odeta Kushi, Deputy Chief Economist at First American, explains:

“. . . millennials continue to transition to their prime home-buying age and will remain the driving force in potential homeownership demand in the years ahead.

That combination of millennial demand and low housing supply continues to put upward pressure on home prices. As Bankrate says:

“After all, supplies of homes for sale remain near record lows. And while a jump in mortgage rates has dampened demand somewhat, demand still outpaces supply, thanks to a combination of little new construction and strong household formation by large numbers of millennials.”


What I love about this recipe is you can substitute any vegetables you have which is a great way to use up produce that's been sitting around. The 1-pan concept makes for easy clean up. All in all, it's a winner! INGREDIENTS:

  • 1 pound Yukon Gold potatoes, cut into 3/4-inch pieces
  • 2 tablespoons extra-virgin olive oil, divided
  • ¾ teaspoon salt, divided
  • ¼ teaspoon ground pepper
  • 2 teaspoons chili powder
  • 1 teaspoon ground cumin
  • ½ teaspoon garlic powder
  • 1 lime, zested and quartered
  • 2 medium bell peppers, any color, sliced
  • 1 ¼ pounds center-cut salmon fillet, skinned, if desired, and cut into 4 portions


  1. Preheat oven to 425 degrees F. Coat a large rimmed baking sheet with cooking spray.
  2. Toss potatoes, 1 tablespoon oil, 1/4 teaspoon salt and pepper together in a medium bowl. Transfer to the prepared pan and roast for 15 minutes.
  3. Meanwhile, combine chili powder, cumin, garlic powder, lime zest and the remaining 1/2 teaspoon salt in a small bowl. Place bell peppers in the medium bowl and add the remaining 1 tablespoon oil and 1/2 tablespoon of the spice mixture; toss well to coat. Coat the salmon with the remaining spice mixture.
  4. After 15 minutes, remove the pan from the oven. Add the peppers and stir to combine. Roast for 5 minutes. Remove from the oven; move some of the vegetables over and add the salmon to the pan. Roast until the salmon is just cooked through, 6 to 8 minutes. Serve with lime wedges.

FiveFour Real Estate is the one-stop shop for those who are ready to take their home or investment to the next level. Our name FiveFour derives from 5.4%: the average annual home appreciation rate in the US over the last 50 years. We know that your real estate investment is one of the largest and most important purchases of your life. With that in mind, our focus and strategy revolves around you. We hold our licenses at the brokerage Five Four Real Estate.  If you buy a home and put 20% down, you are leveraging your money 5X. A 5.4% increase in your home's value means a 27% ROI.

Thinking of Buying or Selling?  Know someone who is?We are NEVER too busy for your referrals!


This could be one of the largest and most important financial decisions you will make in your lifetime, and you deserve an experienced partner that understands the intricacies of Colorado real estate.

We promise to always keep you informed about the rapidly changing market and educate you throughout the entire process. We promise to protect your best interests and treat your home or investment like it’s one of our own. We promise to work our hardest to find the perfect home for you and your family with as little stress as possible.  

We value your trust and hope to continue supporting you in your lifetime even after your sale or purchase is complete. This goes beyond real estate to us, it’s the beginning of a lifelong friendship.

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