Denver’s history can easily include descriptors like “boom town” and the “wild west”. The gold, the silver, the local wars, the railroad, the oil….and now the housing it seems! If you’ve been in the real estate market in recent years, you’d probably agree the modern west is definitely the wild west when it comes to buying or selling a home. Circle the wagons!
Without a doubt, this has been one of the most rewarding (for sellers) and most competitive (for buyers) real estate markets we’ve ever seen. That’s not meant to be a doom and gloom statement, it’s a current reality…the result of market forces at work in a high demand, low supply environment (the front range). At the end of the day, homeownership is worth it…right now it’s just taking some more diligent effort to be among the ranks of “homeowners”!
Let’s take a look at how our Denver area real estate market is shaping up.
We saw a nice uptick in available active homes for sale at the end of March – up to 2,221 homes on the market! But, that was still a miniscule number compared to the current homebuyer demand. As expected with such a small number of homes for sale, homes prices continued to rise. The average price of a single family detached home in our 11 county region jumped to $797,700…… a 19.88% increase from this same time last year. Concurrently, Denver earned itself a not so welcome recognition with this recent article: Denver named in the top 5 least affordable metro areas in the US
The median price of a detached single family home was $660,000, meaning half of the homes for sale across the Denver metro area were priced under $660,000.
Here’s a frequently asked question: Are there any homes that stay on the market longer than the first weekend they are live? We see that the average days on market is about 11 days. We just did a search for homes that have been on the market for longer than 30 days and guess what we found. There are some! In fact, there were (232) single family detached homes on the market for 30+ days at the time of our search. When I narrowed it down to those priced between $400k-$950k with an attached garage, there were still (94) homes available. Curious where those homes are located and what they look like? Here’s a link to those homes: PDF of Homes in Denver Metro Area
How’s our real estate market trending Year-To-Date?
These stats show that our new listings count and our closed count are trailing the YTD numbers through at least the last 4 years. That’s not welcome news for a market that desperately needs new inventory. Our closed price to list price premium is also much higher – I’d venture to say the highest it’s EVER been. The wild west, indeed.
But maybe some welcome news…..
How are some leading indicators playing out now that we’re experiencing interest rates that are significantly higher than what we’ve become accustomed to in recent years?
Higher interest rates are a blessing and a curse. First to keep things in perspective, 4-5% interest rates are still smokin’ deals historically speaking. Yes, higher interest rates translates to higher monthly payments if you don’t increase your down payment amount. But, there are some good things about higher interest rates (potentially). Here’s an article with some thoughts: 4 Reasons Higher Mortgage Rates Are Actually Good for Homebuyers
Now on to leading indicators:
The number of new buyers at the first step of the purchase process continues to lag 2020 and 2021. Historically still strong (better than 2013-19), but this is a leading indicator that some steam is going to come out of the market in 8-12 weeks (that’s the typical lag from mortgage app to going under contract).
The number of showings per active listing is still historically strong as well, but it did take a slight dip in March. For sellers concerned about missing the window of opportunity, no need to worry. There are still SO MANY buyers looking for a great home out there. We’re still way ahead of recent years in terms of activity.
Are foreclosures or mortgage delinquencies on the rise?
We thought this was an interesting national stats chart to share with you.
Foreclosure activity is at one of the lowest levels it’s ever been. Just because home values are high doesn’t mean that people are more delinquent. It’s about the monthly payment not the price tag, ultimately.
We’ll continue to keep you updated on what we see in the real estate market each month.
Want to discuss our real estate market more or have specific questions about a topic? Reach out to us today! We’d be happy to help.
– Drew and team