DMAR Real Estate Market Trends Report | FEB. '24
As the spring selling season kicks off, interest rates have ticked up again and many educated sellers know that buyers are experiencing spring fever and are tired of sitting on the fence watching home prices increase. New listings increased 29.12 percent month-over-month and 22.63 percent year-over-year. Active listings at month’s end rose 13.14 percent to 5,511 homes, an astounding 45.87 percent gain year-over-year.
Serious buyers, on the other hand, showed discernment as they know inventory is growing. Pending sales rose slightly by 12.70 percent month-over-month to 3,514, showcasing that buyers are taking their time to choose the right home for their needs. As a result, sellers who are winning in this market spent time making sure their homes are in show-ready condition. In short, if sellers executed their plan correctly, they received multiple offers and maximized their profit.
“Buyers right now have a different strategy as some were swept into multiple offers on their dream home while others understood they may find gold at the end of the rainbow if they broadened their search parameters,” commented Libby Levinson-Katz, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “These buyers understand that more inventory is coming to the market and that they will have options. They are also aware that they can negotiate on price and terms up-front, as well as negotiate at inspection. Difficult inspections have been on the rise over the last few months. If buyers feel they are paying top dollar due to increasing mortgage rates, they want their new home to be in move-in-ready condition.”
Conscious buyers have another new strategy in their playbook as home insurance availability has also become a serious issue across the country for homeowners, and Denver included. As such, buyers are considering home insurance concerns before submitting an offer and reaching out to their insurance providers to verify they can obtain coverage in their desired area of town. They are then obtaining a CLUE (Comprehensive Loss Underwriting Exchange) Report, which details past claims and uncovers potential hurdles before submitting an offer to help facilitate a smooth transaction. This is invaluable information as some insurance providers are declining coverage, even in Metro Denver, which can easily derail a transaction.
Levinson-Katz continued, “All in all, the spring season is heating up. Prepared sellers can curb a second round of negotiations with buyers at inspection while strategic buyers know what they want before shopping and the options available to them.”
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.
For the $1+ million market, the days when sellers waited for their spring gardens to bloom before listing their homes for sale are now long gone. Sellers jumped in early, listing 689 new homes in February, resulting in the largest month-over-month increase in inventory of any segment of the market. The number of new attached homes priced $1 million and above essentially doubled from January, up a whopping 96.77 percent, while new detached homes were up 58.99 percent.
This large increase in new listings in February caused this market to have dramatically more months of inventory than any other segment. This glut of inventory was particularly noticeable in the attached market, where condos and townhomes priced $1.5 million to $1.99 million had 9.25 months of available inventory and those attached homes over $2 million faced 7.33 months of inventory, making this segment a solid buyer’s market. Detached homes remain a bit more competitive, particularly in the $1 million to $1.499 million price point, where there were only 2.63 months of inventory available. At the higher price points, the market tilted in favor of buyers, particularly in the $2 million plus segment, which had 6.38 months of inventory available in February.
“The early rush hour in the market signals the pent-up desires of sellers, who have been sitting on the sidelines due to the dramatic run-up in interest rates since last spring,” said Colleen Covell, DMAR Market Trends Committee member and Metro Denver Realtor®. “Although the rates have decreased some from their highs last fall, they do not appear to drop below six percent anytime soon. Tired of waiting for optimum sale and rate conditions, sellers decided to jump back in.”
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