DMAR Real Estate Market Trends Report | MAY '24
As the market patiently waits for mortgage rates to adjust downward, the Denver Metro continues to find a way to transact business in this landscape of seven percent interest rates. Patience, preparation and persistence are leading the way. Last month, new listings rose 16.51 percent month-over-month and 33.88 percent year-over-year to 6,966. Pending sales increased a slight 1.94 percent month-over-month with 4,265 properties, while closed sales rose 5.72 percent month-over-month to 4,198. Median close prices fell marginally month-over-month by 0.41 percent. The most notable gain this month was in active listings at month end, which rose 31.03 percent month-over-month, 75.19 percent year-over-year and 150.79 percent from this same time in 2022.
“It was widely projected that inventory would remain flat throughout 2024, as long as there wasn’t a huge drop in mortgage rates,” commented Libby Levinson-Katz, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “It was forecasted that homeowners would favor their low mortgage payments due to sub-four percent interest rates available during the pandemic years, and then enter the market to sell their homes. Additionally, it was predicted that sellers who would enter the market would be motivated by major life changes and were in the ‘need to move’ category. However, that doesn’t seem to be the case, as sellers have been not only stepping but jumping off the fence to enter the market for a variety of reasons.”
Currently, opportunities exist in the Denver market for persistent buyers. The months of inventory have grown to 2.18 marketwide, a 16.58 percent increase month-over-month. Data shows that buyers have the gift of choice and now have more properties to consider before submitting an offer.
Continued Levinson-Katz, “Additional opportunities present themselves in the condo market. These properties experienced a three-pronged financial hit over the last year due to rising HOA fees, association assessments and property taxes. Homeowners in the condo market are paying more to hold onto their properties. As a result, by and large, they are not appreciating as well as they once did due to buyer hesitancy to take on the financial burden.”
This has resulted in a median close price of $407,250 for attached properties, a 2.8 percent decrease month-over-month and a 4.18 decline year-over-year. Median days in the MLS have also increased 16.67 percent month-over-month to 14 days, a 133.33 percent increase year-over-year.
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, subtle changes continue to occur. While interest rates are still the biggest factor in the home buying and selling process, an early spring has led to a plateau. High-demand areas, whether for prestige, location or schools, remain strong. Single-family detached properties continue to be more desirable relative to attached. Overall, there were more active detached properties available than any other price point other than the $500,000 to $749,999 range.
Last year, interest rates rose at a historic rate, slowing down the speed at which buyers were buying. Buyers have become reacquainted with the new normal, increasing the amount of sales year-to-date. This year, the number of closings is up 13.95 percent compared to last year at this time but still down 18.43 percent compared to 2022.
“This stat reflects how hot the market was leading up to 2022,” commented Andrew Abrams, DMAR Market Trends Committee member and Metro Denver Realtor®. “Even though we have seen more sales this year than last, it is clear that the lower interest world of increased sales volume and low days in the MLS are a thing of the past.”
Continued Abrams, “Pricing and preparation have never been more important in this new housing economy. If you are a buyer, being patient and understanding the ins and outs of different neighborhoods has never been more important. The speed at which properties sell, the condition of those properties and the terms sellers are expecting are important for a buyer to set expectations and make a quick decision when they find “the one”. For a seller, the strategy is similar but with less margin for error. List within what the comps support, stage the property and market well to maximize the buyer experience.”
Additional monthly Mortgage Market Trends Insights are brought to you by The Rueth Team of OneTrust Home Loans, the Exclusive Partner of the Denver Metro Real Estate Market Trends Report.
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