DMAR Real Estate Market Trends Report | DEC. '23
For buyers, the gift this season is growing inventory. Active listings at month’s end increased 6.89 percent year-over-year to 6,684, new listings rose slightly by 1.04 percent to 2,717 and closed sales dropped 13.98 percent. Month-over-month data showed active listings dropped 10.67 percent and new listings dropped 28.93 percent. However, that doesn’t paint a true picture of the market as the Denver Metro Area is seasonally based, which means that it typically sees a decline in inventory this time of year.
For sellers, they aren’t left in the cold this season as they have gifts coming their way as well. They have time to prepare their home and mindset for the marketplace as homes are taking longer to sell. The median days in the MLS has grown to 22 days, which is up 37.50 percent month-over-month.
“While December is typically overrun by the holidays, this is actually a great time to get some of the deferred maintenance items completed while vendors are slower,” commented Libby Levinson-Katz, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “Sellers can also set a new frame of reference for life once their home hits the market. If your home sells in one week, great. But if it takes three months, that’s okay, because it’s normal activity.”
Levinson-Katz continued, “Additionally, interest rates are starting a downward trend, and we as Realtors® know that if rates continue to drop, then demand will increase. In fact, many Realtors® saw a flurry of activity last month when rates dropped buoying end-of-year activity. Depending on where rates trend, we may see bidding wars return before we know it.”
Our monthly report also includes statistics and analyses in its supplemental markets that include properties sold for $1 million or greater, properties sold between $750,000 and $999,999 and properties sold between $500,000 and $749,999.
In November, the market dynamics were shaped by higher interest rates and home prices, coupled with an uncertain economic forecast. It's evident that people are not moving solely out of choice. The number of new listings in this price range is a mere 290, marking a substantial 42.46 percent decrease from October. However, this figure is up by 7.81 percent from the same period in 2022, indicating a seasonality and norm associated with the usual slowdown at this time of year.
With interest rates hovering around seven percent, loans approaching $1+ million are impacted significantly. November’s sales volume was down 25 percent from last year and 15 percent from last month. Moreover, homes are selling a bit more below asking price, as the close-price-to-list-price ratio dipped to 97.11 percent. Homes priced over $1 million saw median days in MLS increase at 41.18 percent year-over-year and 9.09 percent month-over-month proving more that buyers are taking their time.
“It’s not that sellers don’t desire to sell their current home and move, it’s that they don’t desire to part with a low APR rate on their current mortgage and trade it for a rate that could be three to four times higher,” said Susan Thayer, DMAR Market Trends Committee member and Metro Denver Realtor®. “And it’s not that homebuyers don’t trust the homebuying process, it’s that they may not trust the state of the economy. Sellers who desire to sell and price their homes accordingly will find there are still plenty of buyers out there – even in the top price range of our market."
Despite it all, 2023 has proven to be quite a strong year for this housing segment. Removing the pandemic years and comparing to 2019, sales volume year-to-date has more than doubled, closed volume has nearly doubled, new listings are up over 66 percent and price per square foot is up over 14 percent.
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