DMAR Real Estate Market Trends Report | MAR. '23
The Denver real estate market continues to stabilize, leaving buyers and sellers looking ahead to the spring selling season to provide insights into how the rest of the year will unfold. New listings, pending sales and closed sales all trended upward month-over-month for attached and detached homes, with the largest gain in closed sales increasing at 25.30 percent. The median days in MLS for detached homes dropped 29.73 percent from 37 days in January to 26 in February. Meanwhile, the median days in MLS for attached homes dropped 17.86 percent from 28 to 23 days.
While activity in the market is on the rise, buyers still need more choices. At the end of the day, inventory remains a challenge for the Denver housing market. New listings for both detached and attached homes are the lowest the Denver Metro area has seen since 2014. The source for more inventory lies with potential sellers who are contemplating a move; however, if these sellers need to buy another home, they are between a rock and a hard place. Their home is no longer working for their lifestyle, but facing an interest rate that may be more than three percent higher than their current rate is a hard pill to swallow. The good news for sellers is that we are still primarily in a seller’s market. The close-price-to-list-price ratio is inching up for both segments with detached homes sitting at 98.81 percent and attached at 99.06 percent showing that buyers are paying what sellers are asking.
“Buyers are watching rates closely and patiently waiting for new inventory to hit the market,” commented Libby Levinson-Katz, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “They are more discerning about home prices, less willing to compete and will only jump into a bidding war if the house is move-in ready and suits their needs. If a home has been sitting on the market or has recently experienced a price reduction, buyers are more inclined to negotiate a rate buy down than a reduction in the purchase price.”
As buyer activity increased in February and more homes hit the market, the median close price for a detached home rose 0.84 percent to $600,000, while the median price for an attached home rose 1.14 percent to $400,000.
Our monthly report also includes statistics and analyses in its supplemental “Luxury Market Report” (properties sold for $1 million or greater), “Signature Market Report” (properties sold between $750,000 and $999,999), “Premier Market Report” (properties sold between $500,000 and $749,999) and “Classic Market” (properties sold between $300,000 and $499,999).
This February, inventory in the Denver Metro Luxury Market was the big news. 494 new listings hit in February, a notable 60.91 percent increase from January. The detached luxury sector saw the greatest increase in inventory of any sector in the Denver market, up 66.15 percent month-over-month. New listings in the attached market increased by 31.91 percent from the prior month.
Those new listings were going under contract much faster, too. The median days in the MLS for luxury homes was 23 days, down more than half at 51.06 percent from January. While nowhere near the frenzied pace of this time last year, which was an average of five days on the MLS, this notable uptick in the pace of the Luxury Market shows that luxury buyers have left winter behind.
“Ignore the calendar; the spring selling season for the Luxury Market has already started,” said Colleen Covell, DMAR Market Trends Committee member and Metro Denver Realtor®. “There is evidence that ‘deals’ in the Luxury Market may be fading. The close-price-to-list-price ratio is inching up from 96.10 percent in January to 98.12 percent in February, which could signal the return of bidding wars.”
The Luxury Market defied the headlines predicting a plummet in home prices, with both detached and attached homes enjoying significant appreciation month-over-month, as well as year-over-year. Detached luxury homes increased to an average of $413 per square foot, an increase of 9.83 percent from January and 4.68 percent from last year. Attached luxury homes saw an even greater price increase, up to $619 per square foot, which is a 38.48 percent increase from January and an annual increase of 12.75 percent.
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